A Study on Financial Literacy and Personal Financial Management among Working Professionals

Abstract: Financial literacy is an essential component of personal financial decision-making because it teaches individuals to learn how to save, borrow, insure, invest, and plan for retirement. The salaries of professionals are fixed. In addition to financial self-discipline, the effective use of their salary earnings involves the application of financial literacy and financial planning skills. This research was conducted to study financial literacy and personal financial management among working professionals with special reference to basic financial awareness and financial practices such as budgeting, saving, investment, borrowing, emergency fund, and retirement planning. Descriptive and exploratory method was adopted in which the researcher used primary data with structured questionnaire from 100 professionals. The study revealed that awareness regarding financial terms such as insurance, inflation, loan features, and compound interest was relatively higher, whereas awareness of tax-saving investments and comparing financial products was comparatively lower. Better personal financial management practices were also observed in terms of prompt repayment and consistent saving than regular investment, emergency fund, review of financial objectives, and retirement planning. There is a gap between awareness and regular practices in the areas of retirement preparation and financial protection.