Impact of Inflation on Personal Financial Planning: Evidence from India

Dr. Pradeep R1
Assistant Professor, Department of Electrical & Electronics Engineering
SNS College of Technology, Coimbatore, Tamil Nadu, India
Email: pradeep.sign@gmail.com Phone no:70105 83248 ORCID NO:0009-0001-2748-8355

Ramanth M2

MBA Business Analytics
SNS College of Technology, Coimbatore, Tamil Nadu, India
Email: ramnathmahalingam@gmail.com   Phone no:  63692 15083

Naveen Kumar P3
MBA Business Analytics
SNS College of Technology, Coimbatore, Tamil Nadu, India
Email: naveenkumar382545@gmail.com  Phone no:6374179313 ORCID NO: 0009-0000-1110-5244

Vaibhav S4
MBA Business Analytics
SNS College of Technology, Coimbatore, Tamil Nadu, India
Email: vaibhavsenthilprabhu@gmail.com Phone no: 99446 18530 ORCID NO: 0009-0005-2665-9115

Abstract
Inflation is a key macroeconomic factor that significantly influences the financial well-being of individuals and households by reducing the purchasing power of money and increasing the cost of living. In India, inflation has fluctuated considerably over the past decade due to factors such as food price movements, crude oil price volatility, supply chain disruptions, monetary policy changes, the COVID-19 pandemic, and global geopolitical developments. These changes have affected household savings, investment decisions, budgeting practices, and long-term financial planning. This study examines the impact of inflation on personal financial planning in India using a quantitative analytical approach based on secondary data collected from reliable national and international sources, including the Reserve Bank of India (RBI), the Ministry of Statistics and Programme Implementation (MOSPI), the Ministry of Finance, the International Monetary Fund (IMF), and the World Bank. Trend analysis, descriptive statistics, percentage analysis, and comparative analysis were employed to evaluate inflation patterns and their relationship with household financial behaviour during the period 2015–2025. The findings indicate that sustained inflation reduces purchasing power, weakens the real value of savings, influences investment preferences, and increases the importance of effective budgeting and financial planning. The study concludes that integrating inflation into financial decision-making through diversified investments, periodic financial reviews, and adequate emergency savings can improve household financial resilience. These discoveries deliver valuable information to households, financial advisors, educators, and policymakers working to improve financial planning tactics as economic conditions shift.

Keywords: Inflation, Personal Financial Planning, Consumer Price Index (CPI), Household Savings, Purchasing Power, Investment Behaviour, Monetary Policy, India.