The structural element of the financial system “household” performs the distribution, investment and control functions of finance. From a sociological point of view, a household is a group of people living in a dwelling house or apartment, a room or part of a dwelling house or apartment that together provides themselves with the necessary means of subsistence and which unites their income in whole or in part or a person who lives in a dwelling house, apartment, room or parts thereof and who independently provides himself with the necessary means of subsistence. From the point of view of investment opportunities, a household is an isolated unit of society that supplies the economy with resources and uses the money received for them.
Taking financial decisions, the household thus determines its present and future state of monetary funds. In this issue, an important role is played by forecasting actions and determining the consequences in various situations. The ability of citizens to manage their finances is reflected in the planning of their incomes and expenditures, setting financial goals for the short and long term.Personal financial planning includes the following stages: definition of financial goals; ranking of financial targets according to the selected criteria; making decisions on implementation and developing an action plan to achieve goals in resource-limited settings; follow the chosen plan or change the plan, if it does not bring the expected results. For financial planning, the household should consider each of its components, namely: income and expenditure management, saving and investment planning, pension planning, personal risk management, tax planning and inheritance planning.
All parts are reflected in an integrated personal financial plan and setting personal financial goals. Personal financial goals depend on the personal characteristics and expectations of each household participant. For some, an important goal will be current consumption without creating reserves for the future, for others, savings for pensions will be relevant. Among the set of goals, basic (provision of nutrition, health, shelter, clothing, etc.) are allocated, after provision, which can lead to more serious and requiring more detailed planning of financial decisions. Household participants can focus on the following objectives: financial relations with insurance companies (life, health, property, liability insurance); purchase of housing or other property, possibly using credit resources; planning of long-term expenses in the field of education; minimization of tax expenses, in terms of benefits and deductions; organization of individual business; maintenance of preservation of a present standard of living in an old age (pension accumulation); transfer of property to the heirs with minimal tax losses. Personal financial goals are not static and depend on the age characteristics of household participants.
And also gender aspect plays a big role in personal financial planning. Integration of a gender perspective is a concept that many agree, but few are able to successfully implement it. Same refers to disaster risk reduction. In the desire to unite these two areas for integrating gender into risk reduction Governments and organizations face practical guidance. They know why they should do it, but do not always know how. The reason for this is not excessive complexity tasks; rather, it is a lack of experience and practical understanding of this tasks. Existing gender relations between men and women in disaster risk reduction are closely linked to the role and responsibility of women and men in the home and in society. Such roles define a different identity, social responsibility, attitude and expectations. Such differences for the most part are unfavorable for women and lead to gender inequality in all socio-economic development, including different vulnerabilities in case of disasters, as well as different ability to reduce risk and react to disasters.
Universal Declaration of Human Rights, approving equal rights of men and women, and the Convention on the Elimination of All Forms of discrimination against women are international legislative basis for ensuring equal rights for women. Within this framework, governments are required to guarantee men and women have equal opportunities in the field of economic, social, cultural, civil and political rights. States introduce the principle of equality men and women in the constitutions of countries and other relevant legislation and provide, through laws and other appropriate means, the practical implementation of this principle. But at the same time, we can see from the sources provided that average pay for full-time female employees was 9.4% lower than for full-time male employees. This makes us to think about: why it happens? and what is the reason for the women to make up a bigger proportion of those who’s working on ‘zero-hours contracts’ .
The purpose of personal financial planning, which can be designated as the formation of personal investment resources before-determines the realization by the household of the investment function in the financial system. Planning of financial decisions should be directed not to current consumption, but to increase of capital, for confidence in the future. Realization in full of investment-household finance functions will not only supplement the insurance, pension and other key elements of the financial system, but also to improve the living standards of the participants themselves households, provide an additional inflow of cash income in the future.