A PROJECT REPORT ON

“STUDY ON FINANCIAN LITERACY AMONG COLLEGE STUDENT NEAR PANVEL”

A Project Submitted to

University of Mumbai for partial completion of the degree of bachelor’s in commerce

(Accounting & Finance)

Under the Faculty of Commerce

By

AKASH MAHENDRA SHARMA

Under the Guidance of

Asst.Prof. TRUSHANT WADKAR

KLE COLLEGE OF SCIENCE AND COMMERCE

PLOT NO,29, SECTOR 1 Rd, SECTOR 3

KALAMBOLI, NAVI MUMBAI 410218

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 A PROJECT REPORT ON

“STUDY ON FINANCIAN LITERACY AMONG COLLEGE STUDENT NEAR PANVEL”

A Project Submitted to

University of Mumbai for partial completion of the degree of bachelor’s in commerce

(Accounting & Finance)

Under the Faculty of Commerce

By

AKASH MAHENDRA SHARMA

Under the Guidance of

Asst.Prof. TRUSHANT WADKAR

KLE COLLEGE OF SCIENCE AND COMMERCE

PLOT NO,29, SECTOR 1 Rd, SECTOR 3

KALAMBOLI, NAVI MUMBAI 410218

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 CERTIFICATE

This is to certify that Mr Akash Mahendra Sharma worked and duly completed her/his Project Work for
the degree of Bachelor in Commerce (Accounting & Finance) under the Faculty of Commerce in the subject
of PROJECT WORK – SEMESTER VI TYBAF and her/his project is entitled, “Study on Financial Literacy
Among College Student Near Panvel Area” under my supervision. I further certify that the entire work has
been done by the learner under my guidance and that no part of it has been submitted previously for any
Degree or Diploma of any University.

It is her/ his own work and facts reported by her/his personal findings and investigations.

Project Guide

Asst.Prof. TRUSHANT WADAKAR

Principal External Examiner

Date of submission:

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 DECLARATION BY LEARNER

I the undersigned MR Akash Mahendra Sharma hereby, declare that the work embodied in this project
work titled “Study On Financial Literacy Among College Student Near Panvel Area”, forms my own
contribution to the research work carried out under the guidance of Asst. Prof. Trushant wadkar is a result
of my own research work and has and has not been previously submitted to any other Degree /Diploma to
this or any other University.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.

I, here by further declare that all information of this document has been obtained and presented in
accordance with academic rules and ethical conduct.

Name and Signature of the Learner

Certified by

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 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions in the
completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this project I would
like to thank my Principal, for providing the necessary facilities required for completion of this project.

I would also like to express my sincere gratitude towards my Project Guide Asst. Prof. TRUSHANT
WADAKAR whose guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books and magazines
related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in the completion
of the project especially my Parents and Peers who supported me throughout my project

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 INDEX

Sr.no Particular Page no.

1 Introduction

2 Objective

3 Research and methodology

4 Review of literature

5 Data analysis and interpretation

6 Conclusion and suggestion

7 Bibliography

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 Chapter 1
Introduction

Define and Introduction:

The capacity to comprehend and efficiently handle one's own finances is known as financial literacy. It
speaks of the abilities and information necessary to make wise choices regarding one's personal finances. A
person who is financially literate is able to comprehend the numerous financial goods and services
accessible, as well as the dangers and advantages related to them. Also, they possess the capacity to
successfully manage their money and make judgement calls that can result in monetary security,
independence, and stability.

Budgeting, saving, investing, managing debt, and comprehending financial goods like insurance,
mortgages, and credit cards are just a few of the many topics covered by financial literacy. Understanding
financial jargon, tax laws, and financial regulations is also necessary. Financial literacy is important for both
adults and children. To create sound financial habits and make wise decisions as they become older,
children need to learn about money and financial management from a young age.

Individuals must have access to financial education resources and programmes in order to develop their
financial literacy. This covers online tools, community initiatives, and in-person activities for financial
education. Recognizing that financial literacy is a lifelong endeavour is also crucial. To adjust to changes in
the financial scene, people must constantly refresh their financial knowledge and expertise.

To sum up, financial literacy is the capacity to comprehend and efficiently manage one's own resources. It
is a crucial life skill that can increase one's financial security, freedom, and sense of safety. Individuals can
acquire and retain their financial literacy throughout their lives if they have access to financial education
programmes and resources.

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 1.1 What is financial literacy:

Student financial literacy is their capacity to comprehend and efficiently manage their own resources. It
calls for a wide range of abilities, including prudent budgeting, saving, investing, borrowing, and spending.
Understanding financial items like credit cards, loans, and mortgages as well as how to handle debt, taxes,
and insurance are all part of financial literacy.

As it prepares them for the financial issues they will confront as they enter the workforce and become
independent adults, financial literacy is an essential life skill for pupils. Students who are financially literate
are better able to manage their income, expenses, and investments in order to meet their financial
objectives.

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Budgeting is a crucial component of financial literacy. Pupils must learn how to make a budget, which
include determining their sources of income, costs, and savings objectives. Also, they must comprehend
the value of saving money and how to set their own financial objectives. Students can learn how to focus
their spending through budgeting and steer clear of going overboard or accruing debt.

Understanding credit and debt is a crucial component of having good financial habits. It is important for
students to understand credit scores, how to establish and keep good credit, and the advantages and
disadvantages of borrowing money. Also, they must comprehend the effects of having debt and how to
successfully manage it.

Another crucial component of financial knowledge is investing. The many investment kinds, including
stocks, bonds, and mutual funds, as well as the dangers and potential benefits of each, should be taught to
students. They must to know how to put together a portfolio of varied investments that satisfies their
financial objectives and risk tolerance.

Financial literacy is an important life skill for students to have since it may help them make wise financial
decisions, reach their financial objectives, and stay away from financial traps. Parents and teachers can
assist children in laying a strong foundation for their financial future by encouraging financial literacy
among kids.

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 1.2 How Financial literacy help

By purchasing assets like stocks, bonds, and real estate that have the potential to increase in value over
time, investing is a means to gradually increase wealth. Understanding various investment possibilities,
weighing risks and rewards, and diversifying their portfolio to lower risk are all made possible by financial
literacy. Building wealth and accomplishing financial objectives, like retirement, can be done effectively
with the help of investments.

1. Debt management:

Debt is a common financial tool that people use to finance large purchases or investments. However, if not
managed properly, debt can quickly become a burden, leading to financial difficulties and a poor credit
score. This is where financial literacy comes in as a crucial tool for managing debt effectively.

One important aspect of debt management is understanding how interest rates function. Interest rates
determine how much extra money a borrower has to pay on top of the principal amount borrowed. A
higher interest rate means higher repayments, which can make it harder to pay off debt. Financial literacy
can help people understand the different types of interest rates, such as fixed and variable rates, and how
they can affect repayment amounts over time.

Another way that financial literacy can help people manage their debt is by helping them develop a
repayment strategy. This involves setting a realistic budget, prioritizing debt repayments, and creating a
plan to pay off debts systematically. Financial literacy can also help people understand different repayment
options, such as debt consolidation or refinancing, and when these options may be appropriate.

Furthermore, financial literacy can help people steer clear of high-interest loans that can be difficult to pay
off. High-interest loans, such as payday loans, can often trap borrowers in a cycle of debt, making it difficult
to pay off the initial loan amount. Understanding the risks associated with high-interest loans and seeking
out alternatives, such as personal loans or lines of credit, can help people avoid falling into debt traps.

Effective debt management can also help people raise their credit score, which is an important factor in
securing future loans and financing.

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 2. Retirement planning:

Planning for retirement is an essential step for ensuring financial security in one's golden years. It involves
preparing for a time when an individual will no longer be working and earning a regular income, and will
instead rely on their savings, investments, and retirement accounts to support themselves.

One of the key aspects of retirement planning is developing a sound understanding of various retirement
plans, such as 401(k)s and IRAs. These plans offer tax advantages and can help individuals save for
retirement in a more efficient manner. It's important to learn about the different types of plans, their
contribution limits, and how they work, in order to make informed decisions about which ones to invest in.

Another crucial step in retirement planning is determining one's retirement income requirements. This
involves assessing one's expected expenses in retirement, such as housing, healthcare, and living expenses,
and estimating how much income will be needed to cover these costs. It's important to consider factors
such as inflation, changes in lifestyle, and unexpected expenses when calculating retirement income needs.

Financial literacy is also an essential component of retirement planning. Understanding basic financial
concepts, such as budgeting, investing, and debt management, can help individuals make informed
decisions about their retirement savings and investments. It's important to seek out resources and
education on financial literacy, whether through books, classes, or working with a financial advisor.

Overall, planning for retirement is an ongoing process that requires careful consideration and attention to
detail. By taking the time to understand retirement plans, assessing one's retirement income needs, and
building financial literacy, individuals can set themselves up for a comfortable and secure retirement.

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 3. Making informed financial decisions:

By comparing costs and benefits, comprehending financial products and services, and avoiding fraud and
scams, financial literacy can assist people in making wise financial decisions. Making wise financial
decisions can assist people in avoiding costly errors and achieving their financial objectives.

“Financial literacy is crucial for people to manage their money wisely, reach their financial objectives, and
stay out of debt”.

The examples are below:

Example1:

To make wise financial decisions, people need to be financially literate. Budgeting is one of the
most important advantages of financial literacy. A budget is a tool that enables people to keep
track of their earnings and outlays, set priorities for their spending, and save money for the
future. Those who are financially literate can learn how to make a budget that works for them,
spot places where they can decrease costs, and come up with ways to save money. The use of a
budget can aid people in achieving their financial objectives, including debt repayment,
property ownership, and retirement planning.

Example 2:

Investing is a crucial component of financial literacy. Over time, investing can assist people in
increasing their wealth, but it can be difficult for those without a strong financial foundation.
Those that are financially literate can learn how to assess various investment possibilities,
diversify their portfolio, and control risk. Also, they can get knowledge about the potential
advantages and dangers of various investment strategies, such as aggressive trading or passive
investing. Retirement planning often includes investing, and financial literacy can assist people
in selecting investments wisely in order to maximise returns and meet their long-term financial
objectives.

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 1.3 Importance:

Financial literacy is a critical life skill that enables individuals to become self-sufficient and financially
stable. Students who possess financial literacy have a better understanding of how to manage their
finances, make informed decisions, and achieve their financial goals.

At its core, financial literacy involves understanding key financial concepts such as budgeting, saving,
investing, and debt management. This knowledge helps students make informed decisions about their
finances, avoid financial pitfalls, and build a solid financial foundation for their future.

Financial literacy also empowers students to make informed decisions about major financial milestones in
their lives, such as buying a home, paying for college, and planning for retirement. By possessing financial
literacy, students are better equipped to navigate the complex financial landscape and achieve their long-
term financial goals.

Moreover, financial literacy also helps students make a distinction between wants and needs, which is a
crucial aspect of personal finance. With this ability, they can prioritize their spending, develop healthy
financial habits, and avoid falling into debt.

In summary, financial literacy is an essential life skill that provides students with the knowledge and skills
necessary to make wise financial decisions throughout their lives. By developing financial literacy, students
can become financially independent, stable, and secure in their future.

Financial literacy is crucial for students for the following reasons:

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1. Better financial decision-making:
Financially literate students possess the knowledge and skills necessary to make informed and
wise financial decisions. This includes understanding the importance of setting up a budget to
track income and expenses, managing credit and debt, and making informed decisions about
spending, saving, and investing. Financially literate students are able to make informed
decisions about borrowing, such as taking out student loans, and have a clear understanding of
the implications of debt. They also understand how to use credit responsibly, such as paying off
credit card balances in full each month, and avoid financial pitfalls such as overspending or
falling into debt. By possessing financial literacy, students can take control of their finances and
achieve long-term financial stability.

2. Avoiding debt:

Students who are financially literate are better able to steer clear of debt traps like high-interest
credit cards, payday loans, and other predatory lending methods.

3. Building savings:
Financial literacy is essential for students to learn the importance of saving money and
achieving their long-term financial goals. By learning how to save, students can accumulate
wealth and set themselves up for financial success in the future.

Financially literate students understand how to create a budget and allocate their income
effectively, setting aside a portion of their earnings for savings. They also understand the value
of compound interest and the benefits of investing their savings.

Saving money is crucial for achieving long-term financial objectives, such as buying a home,
starting a business, or retiring comfortably. By starting early and consistently saving, students
can make steady progress towards these goals.

Ultimately, financial literacy empowers students to take control of their finances, build wealth,
and achieve their long-term financial objectives. It is a critical skill that can provide a foundation
for a secure financial future.

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4. Financial independence:
Financial literacy provides students with the knowledge and skills required to manage their
money effectively, stay out of debt, and achieve financial independence and self-sufficiency. By
understanding how to budget, save, and invest, students can take control of their finances and
avoid debt traps.

5. Improved credit score:

Financial literacy can help students understand how their credit score is calculated and how to
improve it, which can have a significant impact on their ability to obtain loans, credit cards, and
other financial products in the future.

6. Future planning:
Financial literacy helps students plan for their future financial goals, such as buying a house,
starting a business, or saving for retirement.

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 1.4 Advantage of Financial literacy:

Students need to be financially literate in particular because they are frequently only beginning to manage
their own money and make significant financial decisions. The following benefits of financial literacy for
students are more specific:

1. Improved budgeting skills:

A budget is a plan for how an individual will spend their money over a period of time, and
financial literacy can help individuals develop effective budgeting skills in the following
ways:

A. Understanding income and expenses:

Financial literacy can help individuals better understand their income and expenses,
which is the first step in creating an effective budget.

2. Better understanding of student loans:

Those who are financially literate can make spending priorities by putting the most
significant expenses first and allocating money accordingly.

3. More responsible borrowing:

By comprehending loan terms, weighing available loan options, and making a repayment
plan, people with better financial literacy can become more responsible borrowers. People
can avoid high-interest debt and make wise borrowing decisions by being aware of interest
rates, fees, and repayment schedules. Planning for loan repayment by creating a budget and
setting aside funds each month to pay off debt can also help individuals avoid defaulting on
loans, which can have serious consequences for their credit score and financial well-being.
Ultimately, financial literacy can help individuals manage their loans effectively, avoid debt,
and achieve their financial goals.

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4. Improved credit scores:

By comprehending loan terms, weighing available loan options, and making a repayment
plan, people with better financial literacy can become more responsible borrowers. People
can avoid high-interest debt and make wise borrowing decisions by being aware of interest
rates, fees, and repayment schedules. Making a budget and setting money aside each
month to pay off debt can help people avoid defaulting on loans, which can have
detrimental effects on their credit score and financial stability. In the end, financial literacy
can assist people in managing their debt responsibly, staying out of debt, and achieving their
financial objectives.

5. Better preparedness for financial emergencies:

It helps students be better prepared for financial emergencies by teaching them how to save
money, create an emergency fund, and manage unexpected expenses. By understanding
their income and expenses, students can identify areas where they can cut back on
spending and set aside funds each month for emergencies. Financial literacy can also help
students understand the different types of financial emergencies, such as medical bills or car
repairs, and plan for them accordingly. With better preparedness, students can avoid falling
into debt or missing payments during financial emergencies, reducing stress and
maintaining their financial stability.

6. Increased financial independence:

By understanding how to manage their finances effectively, students can become less
reliant on their parents or guardians for financial support. Financial literacy can help
students develop good budgeting habits, set financial goals, and make informed decisions
about spending and saving. This can help students gain a sense of control over their
finances and become more self-sufficient. Financially independent students are also better
equipped to handle unexpected expenses and are more likely to achieve their long-term
financial goals.

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7. Protection from fraud and scams:

By understanding how to recognize and avoid scams, students can protect themselves from
financial loss and identity theft. Financial literacy can help students develop critical thinking
skills to evaluate financial offers and understand the risks involved. Additionally, financial
literacy can teach students how to monitor their credit reports and accounts for signs of
fraudulent activity. By staying informed and aware of common scams and fraud tactics,
financially literate students can protect their personal and financial information and avoid
falling victim to financial scams

8. Increased confidence in managing money:

Financial literacy can also lead to increased confidence in managing money for students. By
understanding the fundamentals of personal finance, such as budgeting, saving, and
investing, students can feel more confident in their ability to make informed financial
decisions. Financial literacy can also teach students how to navigate the complex financial
world, understand financial products and services, and communicate effectively with
financial professionals. With greater confidence in managing their money, students can
achieve their financial goals, avoid financial mistakes, and make informed decisions about
their financial future. Overall, financial literacy can help students build the knowledge,
skills, and confidence necessary to manage their finances effectively and achieve greater
financial success.

9. More effective budgeting and saving strategies:

financial literacy can assist children in creating saving and budgeting plans that are more
successful. Students can make a practical budget that allows them to save for their goals
while still paying for their basic costs by knowing their income and outgoings. Students who
are financially literate can also learn about various saving methods, including goal-setting,
automating saves, and using various kinds of savings accounts. Students may prevent
overspending, increase their savings, and meet their financial goals by cultivating effective
budgeting and saving habits. With effective budgeting and saving strategies, financially
literate students can improve their financial stability, reduce financial stress, and achieve
long-term financial success.

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10. Improved credit scores:

financial literacy can assist children in creating saving and budgeting plans that are more
successful. Students can make a practical budget that allows them to save for their goals while
still paying for their basic costs by knowing their income and outgoings. Students who are
financially literate can also learn about various saving methods, including goal-setting,
automating saves, and using various kinds of savings accounts. Students may prevent
overspending, increase their savings, and meet their financial goals by cultivating effective
budgeting and saving habits. Financially literate students can increase their financial stability,
lessen financial stress, and achieve long-term financial success by using efficient budgeting and
saving techniques.

Chapter 2
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 OBJECTIVE

2.1 objective of the study is following below:

1. Develop good financial habits:

The goal of financial literacy education is to show students how to form wise financial practises that will
help them reach their financial objectives. Making a budget, establishing financial objectives, and learning
how to save and invest money are all included in this. Students can lay a solid foundation for their financial
future by forming these behaviours early on.

2. Avoid common financial mistakes:

Students who are financially literate are also better equipped to prevent common financial blunders like
overspending, taking on high-interest loans, and making poor financial decisions. Students can make wiser
financial decisions and steer clear of financial hazards by comprehending the dangers and effects of these
errors.

3. Navigate the complex financial world:

For students who are just beginning to handle their funds, the financial world can be particularly
complicated and stressful. Students that are financially literate will be more equipped to navigate the
world, comprehend financial products and services, and interact with financial professionals. Learning
about various loans, credit cards, and investments, as well as how to interpret financial documents and
reports, can all fall under this category.

4. Achieve financial independence:

The goal of financial literacy is to enable students to become financially independent. Students can become
financially independent and reach their financial objectives by taking charge of their finances, making wise
financial decisions, and safeguarding their financial future. This can involve undertakings like property
purchases, company ventures, and a comfortable retirement.

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5. Build a strong financial foundation:
Achieving short-term financial goals is only one aspect of financial literacy. Building a solid financial
foundation that will enable students to succeed throughout their life is another important goal. Students
may lay a solid financial foundation that will enable them to succeed financially in the long run by learning
how to manage their money wisely. This can involve making retirement plans, setting up an emergency
fund, and making investments in their future.

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 Chapter 3

Research and methodology

This chapter describe the research and methodology used in this research titled

As “STUDY ON FINANCIAN LITERACY AMONG COLLEGE STUDENT NEAR PANVEL AREA”.

The aim of this chapter is it discus the method used in this research. It is also a vital component in order to
achieve the objective of the decision, clear, accurate and reliable. In this chapter also, we can see the step
is generally adapted to know how to collect data, analyse and interpretation. a. It covers the aspects of
research contrive, research process, population and sampling, data aggregation technique, development of
instrument and data analysis adopted. The purpose of this chapter is to describe the research methodology
of this study, explain the sample selection, describe the procedure used in designing the instrument and
collecting the data, and provide an explanation of the statistical procedure used to analyse the data. The
questionnaire research method has been chosen to understand the present knowledge.

The data is collected in two type:

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1. Primary data:

This data is collected from questionnaire method.

The students near panvel colleges answer that. Around 6-8 question asked for the what they think
money should do. All question is mention in bibliography. The survey is conducted through google
form application.

2. Secondary data:

The Secondary data is Existing Databases Many organizations maintain databases of information
related to their operations, customers, or other aspects of their business. These databases can be
accessed to obtain secondary data, which can be used to support research objectives. For example,
a researcher interested in consumer behaviour might access a database of customer purchase
histories to analyse trends and patterns over time.

Thi data is collected from the various source which is mention in bibliography. This data is help to
analysis the related topic.

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 Chapter 4
Literature review

 Impact of Financial Literacy on Investment Behavior: Evidence from Indian Stock Market" by K. Revathy
and S. Srinivasan (2017) is a study that investigates the link between financial literacy and stock market
investment behaviour among individual investors in India. In this paper show importance of financial
literacy and investment behaviour in the context of the Indian stock market is highlighted. Despite the
stock market's recent significant growth, many individual investors lack the financial literacy needed to
make wise investment choices.

 Financial Literacy among Women in India: An Empirical Study" by Nidhi Maheshwari and Jyoti Gupta
(2017) is a research paper that examines the level of financial literacy among women in India. The
study uses a survey of women across various socio-economic backgrounds to measure financial literacy
levels and assess the factors that influence financial literacy among women. The study found that the
level of financial literacy among women in India is generally low, with only 39% of women surveyed
demonstrating a basic understanding of financial concepts. The authors identify several factors that
influence financial literacy among women, including education, income, age, and employment status.

The study also found that women who received financial education from their parents or family
members tended to have higher levels of financial literacy. However, formal financial education
programs, such as those offered by banks or other financial institutions, were found to be less
effective in improving financial literacy among women

 financial Literacy and Retirement Planning in India: An Empirical Analysis" by Sujata Kapoor and Alok
Kumar Mishra (2018) is a research paper that explores the relationship between financial literacy and
retirement planning among individuals in India. The study uses data from a survey of individuals aged
45 years and above to measure financial literacy levels and assess the factors that influence retirement
planning.

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The paper begins by highlighting the importance of financial literacy in retirement planning, particularly in
the Indian context where the traditional system of joint family support for elderly people is becoming less
common. The authors also provide an overview of the existing literature on financial literacy and
retirement planning in India.

The study found that financial literacy levels are generally low among individuals in India, with only 40% of
the survey respondents demonstrating a basic understanding of financial concepts. The authors also found
that financial literacy levels are positively correlated with retirement planning, with individuals who have
higher financial literacy being more likely to engage in retirement planning.

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 Chapter 5

Data analysis and interpretation

This data which was collected from the survey form that is primary method of collection of data
and various research paper and websites.

1. financial literacy?

Financial literacy can mean different things to different people, but generally refers to having
knowledge and understanding of various financial concepts such as budgeting, saving, investing,
credit, and debt.

According to my survey, out of 100 student 95 percent students are aware of the term financial.
This data show that our generation gaining knowledge and skills too.
Previously, peoples they gaining knowledge are is not simple as todays world. And gaining skills
is one of the most difficult tasks to perform.

But, now the knowledge is in hand (through use of mobile, laptop, and other modes.) and skills
can also be gain through online lectures, job, videos, etc.

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The above data is part of the survey that classify the students according to their stream i.e. Science,
Commerce, Arts.

It is important to understand that the assumption that students' backgrounds are solely determined by
their chosen field of study is flawed. While it is true that different academic disciplines focus on specific
subject matter, it is incorrect to assume that students do not have knowledge outside of their chosen field.

For example, a commerce student may have studied finance in their classes, but they could also have
interests or experience in other areas such as literature, history, or science. Similarly, a science or art
student may have knowledge and skills that are not directly related to their field of study.

It is also important to recognize that students have different learning styles and abilities. Some students
may excel in their chosen field of study, while others may struggle despite their interest in the subject
matter.

Furthermore, the assumption that science and art students have low knowledge is simply not true. While
these fields may not focus on finance or business, they provide students with valuable critical thinking and
problem-solving skills, as well as creativity and artistic expression.

In conclusion, while a student's chosen field of study may influence their knowledge and skills in specific
areas, it is important to remember that students are diverse individuals with unique

experiences and interests. We should not make assumptions based solely on their academic background,
but instead recognize the value and potential in each student.

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2. Awareness towards capital/money:

Most of the time people preferred to secure and save money in banks option such as saving
account or fixed deposit account because of flexibility of money, but it carries low interest rates.
On other hand some might think to invest to get better interest on theirs amount.
The investing money or saving depends on the person point of view. Financial literacy helps to
take financial decision. Where to invest, how much to invest, how to invest.
Capital or money is undoubtedly an important aspect of life as it influences most of the
significant decisions we make. From purchasing a home, starting a business, or planning for
retirement, financial decisions have a profound impact on our lives. Therefore, it is crucial to
have a good awareness and mentality of finance to make informed decisions about where to
save or invest our money.

The awareness of finance means having a basic understanding of financial terms, concepts, and
principles. It includes understanding how to create a budget, manage debt, invest money, and
plan for retirement. Without this basic knowledge, it is easy to make costly financial mistakes
that can have long-term consequences.

Having the right mentality about finance is equally important. This means having a mindset that
values financial planning and recognizes the importance of saving and investing. A good
financial mindset focuses on long-term goals, avoids unnecessary spending, and prioritizes
financial stability over instant gratification.

When it comes to saving or investing, the decision depends on the individual's situation,
financial goals, and risk tolerance. Saving involves putting money aside for future needs and
emergencies, while investing involves putting money into assets with the hope of generating
returns in the future.

For short-term goals, such as saving for a down payment on a house or a new car, saving in a
high-yield savings account or a certificate of deposit (CD) might be the best option. These are
low-risk options that provide a guaranteed return on investment.

For long-term goals, such as retirement, investing in the stock market, bonds, or real estate
might be a better option. These investments come with higher risks, but they also have the
potential for higher returns over the long term.

It is important to note that no investment is entirely risk-free, and it is crucial to do thorough

research and seek professional advice before investing. It is also essential to have a diversified
portfolio that spreads the risk among various asset classes to mitigate the risk of losing all your
investments in one asset class.

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The above data show that the participant choice where to invest, save or both. From this data we can
assume that we know the awareness of saving as well as investing which help in critical situations.

In conclusion, capital or money is indeed one of the most important and impactful decisions in life. Having
good financial awareness and mentality are crucial for making informed decisions about where to save or
invest our money. The decision on where to save or invest depends on the individual's situation, financial
goals, and risk tolerance. Whether saving for short-term or investing for long-term goals, it is essential to
do thorough research and seek professional advice to make informed decisions.

3. High returns and security:

Deciding between high returns and security as a financial option depends on an individual's
financial goals, risk tolerance, and investment horizon. There is no one-size-fits-all answer to
this question as different people have different needs and preferences. However, I can provide
one example of each option to help illustrate their differences.

High Returns: One example of an investment that offers high returns is investing in stocks.
Stocks are equity securities that represent ownership in a company, and they offer the potential
for high returns over the long-term. However, investing in stocks comes with a higher level of
risk as the value of stocks can fluctuate widely based on market conditions and the performance
of the underlying company.

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 Security: One example of an investment that provides security is a certificate of deposit (CD). A
CD is a savings certificate issued by a bank that pays a fixed interest rate over a specified period.
CDs are considered low-risk investments as they are insured by the FDIC up to ₹ 250,000 per
depositor per bank. CDs provide a guaranteed return on investment and are an excellent option
for individuals who want to protect their capital while earning a modest return.

As per the survey the data and card are below:

When it comes to managing one's finances, there are typically two options that people tend to consider:
saving or investing. Both saving and investing involve putting aside money for future use, but they differ in
terms of risk, return, and flexibility.

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Saving typically involves putting money in a bank account, such as a savings account or fixed deposit
account. These accounts offer low interest rates, but they are generally considered low-risk options as the
money is FDIC insured, meaning that the bank is required by law to protect the funds in the account up to
a certain amount. Saving is a good option for those who want to keep their money secure and accessible.
However, the downside is that the returns are low, and the purchasing power of the money may decrease
over time due to inflation.

Investing, on the other hand, involves putting money into various financial products, such as stocks, bonds,
mutual funds, or real estate, with the goal of earning a higher return on investment. Investing has the
potential for higher returns but also involves higher risk, as the value of investments can fluctuate in
response to market conditions. However, investing can also help beat inflation and grow wealth over time.

For example, let's say you have ₹ 10,000 to invest. If you put it into a savings account that pays 1% interest
per year, after five years, you would have ₹ 10,511. However, if you invest that same ₹ 10,000 into a
diversified portfolio of stocks and bonds that averages a 6% return per year, after five years, you would
have ₹ 13,382. Investing can potentially provide a higher return, but it also comes with the risk of losing
money if the market doesn't perform well.

In conclusion, whether to save or invest depends on your financial goals, risk tolerance, and time horizon.
Saving is a low-risk option that provides easy access to your money, while investing offers the potential for
higher returns but with greater risk. It's important to do your research and consult with a financial advisor
to determine the best option for your specific financial situation.

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4. Capacity to invest

Investing is an important part of financial planning. It helps individuals to grow their wealth over
time and provides a cushion for unexpected financial emergencies. However, the capacity to
invest varies from person to person depending on their income, expenses, and financial goals.

To determine the percentage of income that should be spent on investment, it is important to

consider several factors. One of the most important factors is inflation. Inflation refers to the
rate at which the prices of goods and services increase over time. It erodes the purchasing
power of money and reduces the value of savings. Therefore, it is important to invest in
instruments that provide returns that are higher than the rate of inflation.

Another factor to consider is the individual's financial goals. Some individuals may have short-
term financial goals, such as saving for a vacation or a down payment on a house. Others may
have long-term financial goals, such as saving for retirement or their children's education. The
percentage of income that should be spent on investment will vary depending on the
individual's financial goals.

Finally, it is important to consider the individual's current financial situation. This includes their
income, expenses, debts, and assets. Individuals with higher incomes and lower expenses may
be able to invest a larger percentage of their income than those with lower incomes and higher
expenses. Similarly, individuals with significant debts may need to prioritize paying off their
debts before investing a large percentage of their income.

There are several methods that can be used to determine the percentage of income that should
be spent on investment. One common method is the "50/30/20" rule. This rule suggests that
50% of income should be spent on necessities such as housing, food, and transportation, 30%
should be spent on discretionary expenses such as entertainment and travel, and 20% should be
saved or invested.

However, this rule may not be appropriate for everyone. Individuals with higher incomes may
be able to invest a larger percentage of their income, while those with lower incomes may need
to prioritize necessities and may not have discretionary expenses to cut back on.

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The capacity of investing is different from person to person What people think that how much %of income
should spend on the Investment to count the inflation and better returns.

Majority of the student think that 10 % is good amount to invest and second of them are 5% which is quite
low but they think as per their view. And another think remine thinks to invest 20% or more than +20% of
their income.

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5. Investment Options

When it comes to investing, there are various options available in the market, including gold,
stocks, mutual funds, real estate, and collectibles. Each option has its own advantages and
disadvantages, and choosing the right investment option depends on an individual's financial
goals, risk tolerance, and investment horizon.

Gold: Gold has been considered a secure investment option for centuries due to its intrinsic
value and rarity. It is a tangible asset that can be held physically or through ETFs (Exchange
Traded Funds) and gold mutual funds. One of the major advantages of investing in gold is that it
is not affected by inflation or currency fluctuations, making it a popular option for hedging
against inflation. However, the return on gold investments may not be as high as other
investment options.

Stocks: Stocks are ownership shares of a company listed on a stock exchange. Investing in stocks
can provide high returns, but it comes with higher risk due to market volatility. The returns from
stocks are generated in the form of capital appreciation and dividend income. It is important to
conduct proper research and analysis of the company before investing in its stock. One can
invest in stocks directly or through mutual funds and exchange-traded funds.

Mutual Funds: Mutual funds are a popular investment option, especially for beginners. A
mutual fund pools money from various investors to invest in a diversified portfolio of stocks,
bonds, or other securities. It is managed by a professional fund manager, who invests the
money on behalf of the investors. One of the major advantages of investing in mutual funds is
diversification, which reduces risk. Moreover, mutual funds offer liquidity, ease of investment,
and tax benefits.

Real Estate: Real estate is another popular investment option that provides long-term capital
appreciation and regular rental income. It can be a physical property or a Real Estate
Investment Trust (REIT). Real estate investments provide an opportunity to leverage and
increase returns through mortgage financing. However, real estate investments require a large
capital investment and come with the added responsibilities of property maintenance and
management.

Collectibles: Collectibles such as art, antiques, coins, and stamps have also been used as an
investment option. The value of collectibles is subjective and depends on various factors such as
rarity, condition, and historical significance. Investing in collectibles requires specialized
knowledge and expertise, and there may be a high cost associated with storage and insurance.
Moreover, collectibles are illiquid and may not provide regular income.

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Example:

Let's consider the investment options for an individual with INR 10 lakh to invest in India. The individual
has a moderate risk appetite and a long-term investment horizon of 10 years.

Gold: Investing in gold can provide a secure investment option, and the individual can invest in gold ETFs.
Assuming an annual return of 6%, the individual can invest INR 3 lakh in gold ETFs, which can potentially
grow to INR 5.5 lakh in 10 years.

Stocks: Investing in stocks can provide high returns, but it also comes with higher risk. Assuming an annual
return of 12%, the individual can invest INR 4 lakh in stocks, either directly or through mutual funds, which
can potentially grow to INR 12.4 lakh in 10 years.

Mutual Funds: Investing in mutual funds can provide diversification and ease of investment. Assuming an
annual return of 10%, the individual can invest INR 2 lakh in mutual funds, which can potentially grow to
INR 5.9 lakh in 10 years.

Real Estate: Investing in real estate can provide long-term capital appreciation and regular rental income.
Assuming an annual rental income of 4%, the individual can invest INR 1.5 lakh in real estate, which can
potentially provide an annual rental income of INR 6.

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This chart show that students are also interested in gold option because of its uses, price, and traditional
approach.

And other option in which most of numbers show is stocks its can be in equity and preference as per their
preference’s.

The next is mutual fund option which Is getting popular in India because of its simple structure and
beginner’s friendly concepts.

And in other option there are land and building, real-estate, panting, artefact, etc.

6. Saving options:

Saving money is an essential aspect of financial planning. It not only helps you to have a safety
net for emergencies but also enables you to achieve long-term financial goals such as
retirement, education, or buying a home. However, the choice of saving options that you select
must be flexible and provide liquidity for your funds.

The most common saving options available include savings accounts, cash, fixed deposits, and
other investment options. Let's look at each of these options in detail.

Savings Accounts:
A savings account is the most common and popular option for saving money. This type of
account is offered by banks and financial institutions and provides a safe and secure way to
store your money. Savings accounts offer the advantage of liquidity, which means you can
withdraw your funds at any time without any penalty.

The interest rate on savings accounts is lower compared to other options. However, some banks
offer higher interest rates if you maintain a minimum balance or if you opt for a high-yield
savings account. The advantage of a savings account is that it is FDIC-insured, which means your
money is protected up to a certain amount in case the bank goes bankrupt.

Cash:
Keeping your savings in cash is the most liquid option. However, it comes with its own set of
risks. Cash can be lost or stolen, and it doesn't earn any interest. It's essential to store cash in a
safe place and avoid carrying too much cash on you.

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Fixed Deposits:
Fixed deposits are a type of investment where you deposit a lump sum of money with a
financial institution for a fixed period. The money earns interest, and you get back the principal
plus interest at the end of the term. Fixed deposits offer higher interest rates compared to
savings accounts, and the longer the term, the higher the interest rate.

The disadvantage of fixed deposits is that they are not as liquid as savings accounts. You cannot
withdraw the money before the term ends without paying a penalty. However, some banks
offer the option of breaking the fixed deposit prematurely with a lower interest rate.

Other options:
There are various other investment options available, such as money market accounts, bonds,
stocks, and mutual funds. These options offer higher returns compared to savings accounts and
fixed deposits. However, they also come with a higher risk.

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As this chart show the in saving option students or participants think the best option to save money

1. saving account: In this a/c there is flexibility and liquidity of money but the interest rate is low
compare to other options
2. Fixed deposit account: in this a/c consumer will get high rate of interest but no liquidity. But banks
allow to break the a/c but the interest will be low
3. Cash: This is most practice act of saving in household. It does not contain any interest. But contain
highest liquidity in all options

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 Chapter 6

Conclusion and Suggestion

A vital component of contemporary life, financial literacy has the power to influence both individuals and
the economy as a whole. Many students in India lack adequate financial knowledge, which can result in
poor financial decision-making abilities and constrained opportunities for financial growth. This problem
can be solved by adding finance as a subject to all streams or by implementing financial education in
schools and colleges. By doing this, students will gain knowledge of crucial ideas like saving money,
investing, and financial planning, all of which can aid them in making wiser financial decisions.

Understanding the value of capital and its role in achieving financial security is one of the main advantages
of financial literacy. Students will be able to manage their finances wisely if they are aware of the various
investment options that are available to them. They will also be able to comprehend the advantages and
disadvantages of various investment types, which can aid them in making wise financial decisions.

Additionally, financial education can aid students in acquiring crucial abilities like financial planning and
budgeting. Students will be better prepared to manage their finances skilfully even when faced with
unforeseen financial difficulties after learning about these concepts. They will be able to plan a sensible
budget, control their spending, and accumulate savings. They will be able to accomplish their financial
objectives and increase their financial security by doing this.

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Financial literacy can also encourage a culture of saving and investing in the nation, which is a significant
advantage. The government can increase the nation's overall savings rate, which can support economic
growth, by encouraging people to save and invest their money. A more financially literate populace may
also be more likely to make stock market investments or launch their own companies, both of which can
boost economic growth and add jobs.

Finally, financial literacy is a critical component of contemporary life that has the potential to have an
impact on both individuals and the economy as a whole. Students can learn about crucial ideas like
investment, saving, and financial planning by adding finance as a subject in all streams or by introducing
financial education in schools and colleges. They can use this information to improve their financial
decisions, reach their financial objectives, and support the expansion and improvement of the Indian
economy. The government can encourage a culture of saving and investing by cultivating a financially
literate populace, which will ultimately be advantageous to people and the economy.

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Although it requires effort and discipline to develop good financial habits, the rewards are great.
Individuals can achieve financial security and stability and position themselves for a successful financial
future by making and sticking to a budget, saving regularly, managing debt well, and remaining informed
and educated about financial matters.

It's crucial to concentrate on creating multiple income streams, such as through a side business or passive
sources of income. Individuals can achieve financial stability and act as a buffer against unforeseen
financial challenges by diversifying their sources of income.

During the time of covid-19 the world realises that the income from singe side that is single income source
is not suitable and uncertain pandemic and any other natural problems.

It is crucial to concentrate on creating an emergency fund. An emergency fund can provide a safety net
during unexpected financial challenges, such as a job loss or medical emergency. In times of crisis, having
an emergency fund can help people avoid debt and keep their financial stability.

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 Chapter 7

Bibliography

QUESTIONNAIRE:

1. email

2. Age
a. 18-24
b. 25-59
c. 60+

3. Background
a. Science
b. Commerce
c. Arts

4. Are you aware of the word financial literacy

a. Yes
b. N0

5. Money should be in
a. Saving
b. Investment
c. Both

6. Which option carry Higher returns

a. Saving account
b. Investment
c. Fixed deposit
d. Other

7. How much % of income will you spend on investment

a. 5%
b. 10%
c. 20%
d. More%

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8. Best investment option
a. Gold
b. Stocks
c. Mutual fund
d. Other

9. Best saving options

a. Saving
b. Fixed deposit
c. Cash other

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 REFRENCES:

1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3391455

2. https://scholar.google.com/scholar?
hl=en&as_sdt=0%2C5&q=Financial+Literacy+among+Women+in+India%3A+An+Empirical+Study
%22+by+Nidhi+Maheshwari+and+Jyoti+Gupta+%282017%29+&btnG=

3. https://www.google.com/search?
q=financial+literacy+in+india+among+studens&rlz=1C1PNBB_enIN1041IN1041&oq=financial+literacy
+in+india+among+studens&aqs=chrome..69i57j33i10i160l3.15867j0j7&sourceid=chrome&ie=UTF-8

4. https://lh3.googleusercontent.com/
C4PYvI1Z0gXKrVrQw7Ym89a4KtV5iUhGCFjbDZm5NOeDDlzzqCG4SiGG3EBdL_GlZF1L_r0_PaUvPnA_eD
wQiIP9Ux5IaF6ywmModV9Q

5. https://lh3.googleusercontent.com/zN9I-bEB_uKe770zJK4ZUHBlMFsp-
bHrxegqke5jXlaHj2cOS2SDTkYbF-PbJiySAZPvLIa4lcnhzYx9k8P-XcOC8swzYIcvFyBwWL-R

6. study on financial literacy college students research paper - Google Scholar

7. Financial Literacy - Overview, Benefits, Importance (corporatefinanceinstitute.com)

8. https://surveyheart.com/form/640086bd507ee226d2b440dd

9. https://encrypted-tbn0.gstatic.com/images?
q=tbn:ANd9GcSmevOZr8H97dbMNd9MVfFKNXwHCTeYwa8sNA&usqp=CAU

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Thank you

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