Influence of Personal Financial Management Practices in Personal Financial Satisfaction of Individuals in Kathmandu

Abstract

Purpose: This study examines the influence of personal financial management (PFM) practices on personal financial satisfaction among individuals in Kathmandu, integrating the Theory of Planned Behavior and Financial Capability Model (FCM) Theory. 

Design/Methodology/Approach: A quantitative research design was employed using a structured survey among 410 respondents selected through Non-Probability Convenience Sampling. Partial Least Squares Structural Equation Modeling (PLS-SEM) was applied to assess the predictive power of factors affecting PFM practices and their relationship with financial satisfaction.

Findings: Results reveal that PFM practices significantly influence personal financial satisfaction among individuals in Kathmandu. Investment planning emerged as a key contributor, along with saving, budgeting, debt management, and preparation for unexpected expenses. Key challenges include lack of financial knowledge, low income, impulsive spending habits, and insufficient emergency planning.

Originality/Value: The study underscores that PFM practices—saving, spending, debt management, investing, and managing unexpected expenses—are crucial for improving financial satisfaction. Addressing barriers through school-based education, digital tools, community programs, and supportive policies is essential to strengthen financial behavior and enhance financial well-being in Nepal.