Bondareva S.A.Russian Presidential Academy of National Economy and Public Administration, Volgograd Branch, Volgograd, Russian Federation s.a.bondareva@mail.ru
Importance Unpredictability and cyclical nature of economy, uncertainty in making personal financial decisions give rise to various risks, which affect the sustainability of personal finance. In this respect, personal finance risks should be managed to mitigate subsequent financial losses. Objectives The objective of the research is to identify and analyze risks in a system of personal finance, investigate specifics of managing the risk of personal finance and determine the role of the State in risk management. Methods Using general economic and statistical methods, I substantiate the process of managing the risks of personal finance and analyze risks in a system of personal finance. Results Risks in a system of personal finance include physiological, property, investment, pension risks and risks of unemployment, liability and insolvency. As the analysis of statistical data shows, the level of such risks rises in Russia. There is an economic rationale for using a three component model to protect a person from financial effects of risks. The State plays a special role in risk management as it acts as the insurer of last resort and regulates the risk allocation process in economics. Conclusions and Relevance I conclude that risk management in personal finance contributes to optimizing cash flows, ensures the sustainable development of personal finance and financial well-being of residents. The outcome of the research into risks of personal finance may be used by governmental authorities and financial companies to monitor financial security of population and provide financial advice and improve retail financial products and services respectively.
Keywords: risk, personal finance, risk classification, risk management, government regulation
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