Living beyond one’s means: evidence from Malaysia

2015 ◽  
Vol 43 (1) ◽  
pp. 2-18 ◽  
Author(s):  
Yiing Jia Loke
Keyword(s):  
Low Income ◽  
Financial Literacy ◽  
Financial Distress ◽  
Financial Management ◽  
Practical Knowledge ◽  
Financial Education ◽  
Financial Knowledge ◽  
Content Type ◽  
Explanatory Variables ◽  
Financial Behaviour

Purpose – The purpose of the paper is to identify the determinants of the probability of living beyond one’s means. The paper also explores the coping mechanisms of those financially distressed as well as the debt taking behaviour of consumers. Design/methodology/approach – The study uses data obtained from the OECD International Network on Financial Education pilot study on Measuring Financial Literacy in 2010 for the case of Malaysia. A logistic regression model is used to identify the main determinants of the probability that a consumer will live beyond his/her means. The analysis is carried out by using a set of socio-economic factors and the individual’s financial behaviour and attitudinal characteristics as explanatory variables. Findings – The findings indicate that low income and seasonal income earners are more vulnerable to financial distress. Furthermore, having a higher education, higher financial knowledge and prudent financial behaviour and attitude do not necessarily translate into better financial management. Family and friends provide the main source of financial assistance in times of need. Research limitations/implications – The assessment of financial knowledge should go beyond individual’s knowledge on financial concepts and theories. Practical knowledge on financial and cash flow management should be assessed. Practical implications – The study reiterates the importance of financial education. It is imperative to include financial education as part of the schools’ curriculum and also to be incorporated as part of the Continuous Professional Development modules for working adults. Originality/value – The study is based on the first nationwide study of consumer finances in Malaysia. It contributes to the literature by integrating financial behaviour and attitudinal factors into the analysis of the ability of individuals to live within their means. The findings also show the limitations of the existing self-assessment of financial behaviour and attitude and the assessment of financial knowledge.

scholarly journals Some Insights Into Financial Literacy Among Undergraduate Students: A Case of Bosnia and Herzegovina

2021 ◽  
Vol 12 (3) ◽  
pp. 103
Author(s):  
Jasmina Okicic ◽  
Meldina Kokorovic Jukan ◽  
Mensur Heric
Keyword(s):  
Undergraduate Students ◽  
Financial Literacy ◽  
Sampling Technique ◽  
Financial Education ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Financial Attitudes ◽  
Significant Difference ◽  
Financial Behaviour ◽  
The Relationship

The purpose of this research is to provide some insights into financial literacy among undergraduate students focusing primarily on the relationship between financial knowledge, financial attitudes and financial behavior and on possible gender and financial education gap in financial literacy. Using the purposive sampling technique, data collection was carried out from April to June 2020, yielding a sample of 1,046 valid responses. To gain a better understanding of the relationship between financial behaviour, financial attitudes and financial knowledge, we, primarily, use exploratory factor analysis and multiple regression model. The research findings have revealed several important issues. First, findings have suggested that financial knowledge, financial attitudes and gender may be considered as an antecedent of the financial behaviour of undergraduate students. Second, findings have also suggested a statistically - significant difference between the financial literacy of undergraduate students concerning their exposure to formal financial education.

Subjective financial knowledge, prudent behaviour and income

2019 ◽  
Vol 37 (4) ◽  
pp. 934-950 ◽  
Author(s):  
Leonore Riitsalu ◽  
Rein Murakas
Keyword(s):  
Financial Literacy ◽  
Financial Education ◽  
Well Being ◽  
Financial Knowledge ◽  
Future Research ◽  
Objective Knowledge ◽  
Content Type ◽  
Subjective Knowledge ◽  
Subjective Financial Knowledge ◽  
Behaviour Score

Purpose The purpose of this paper is to study how subjective and objective knowledge of finance, behaviour in managing personal finances and socio-economic status affect financial well-being. Design/methodology/approach The financial well-being score is constructed in quantitative financial literacy survey data from Estonia as the arithmetic mean of four statements on a five-point scale. Four hypotheses are tested in multiple regression analysis. Findings Subjective knowledge has a stronger relation with financial well-being than objective knowledge. Financial behaviour score and income level correlate with financial well-being. Research limitations/implications The paper contributes to literature on financial literacy, subjective financial knowledge and financial well-being. In future research, psychological factors and future orientated financial well-being should be included, and their relationship to subjective well-being could be analysed further. Practical implications The results highlight the importance of subjective knowledge and sound behaviour for improving financial well-being. Providers of financial services should address these more in the design of their services and communication. Social implications Policymakers developing national strategies for financial education need to address subjective financial knowledge for increasing financial well-being in society. Originality/value Knowledge, behaviour and subjective knowledge have not been used simultaneously in the analysis of financial well-being in Europe before.

scholarly journals THE INFLUENCE OF SOCIO-DEMOGRAPHIC AND FINANCIAL KNOWLEDGE FACTORS ON FINANCIAL MANAGEMENT PRACTICES OF MALAYSIANS

2017 ◽  
Vol 18 (1) ◽  
Author(s):  
Yiing-Jia Loke
Keyword(s):  
Financial Literacy ◽  
Financial Management ◽  
Management Practices ◽  
Financial Education ◽  
Financial Knowledge ◽  
Insurance Policy ◽  
Management Behaviour ◽  
Income Shock ◽  
The Individual ◽  
Socio Economic Factors

Using the pilot survey data on "Measuring financial literacy" in 2010 from OECD (International Network for Financial Education, INFE), this paper aims to investigate the influence of sociodemographic and financial knowledge factors on four selected financial management practices of Malaysians. The four types of financial management practices are: whether the individual plans a budget, lives within their means, is prepared for income shock and owns an insurance policy. These four financial management practices are used to measure individuals' overall financial management behaviour. The measurement of financial management behaviour is divided into three levels depending on the type of financial management practices carried out by individuals. Ordered probit is used to determine socio-economic factors that are significant in explaining the varying differences in the financial management behaviours among Malaysians. The paper also identifies the financial knowledge gaps and investigates the levels of financial knowledge of Malaysians. While the majority of Malaysians show an average level of financial knowledge and plan their budget, many are financially unprepared for income shock and unexpected circumstances. The findings show that ethnicity, income, gender, regularity of income, education, age and financial knowledge have significant effect on individuals’ financial management behaviour. The findings have implications for regulators, financial educators and consumer groups in their efforts to enhance individuals’ financial management behaviour. Keywords: Emergency Saving; Financial Capability; Financial Knowledge; Living within One's Means; Personal Finance.

Some Aspects about Financial Knowledge of Undergraduate Students

2013 ◽  
Vol 2 (4) ◽  
pp. 40-62
Author(s):  
Elena Moreno-García ◽  
Arturo García-Santillán ◽  
Juan Pablo Munguía-Tiburcio
Keyword(s):  
Learning Styles ◽  
Undergraduate Students ◽  
Financial Literacy ◽  
Financial Services ◽  
Financial Management ◽  
Principal Component ◽  
Financial Education ◽  
Financial Knowledge ◽  
Important Indicator ◽  
Financial Issues

The purpose of study is to measure the level of financial literacy of accounting students at the Universidad Veracruzana; campus Mocambo, considering that financial education is the knowledge that people have on financial issues in order to solve everyday problems regarding financial management. The variables analyzed include age, gender, race, socioeconomic status, learning styles and student’s perceptions on financial services, the way they take care of their money and their knowledge of five key financial issues. Three hypotheses were raised, therefore, in order to test H1 we performed a factorial analysis with an extracted principal component; to H1.a the statistical procedure of linear correlation of Pearson r and t test are applied, and to H2 a Z test is performed. Although the theory suggests that the level of higher education gives the student a better understanding of the financial issues, this research however, proves otherwise. In fact, the range of “excellent money management” is below 50%. The findings suggest that there is no a good level of financial literacy in the population studied. This fact is contrary to expectations, because the student who studies public accountant is expected to have financial knowledge in these subjects, all this, in considering the subjects which integrates the curriculum related to the field of finance. Therefore this finding should be an important indicator for the academic authorities of the Universidad Veracruzana for corrective actions in this respect.

scholarly journals KARAKTERISTIK SOSIAL EKONOMI YANG MEMPENGARUHI LITERASI KEUANGAN SERTA DAMPAKNYA TERHADAP MANAJEMEN KEUANGAN PERSONAL (Survei Pada Pegawai Negeri Sipil Daerah di Kabupaten Kuningan)

2017 ◽  
Vol 1 (02) ◽  
Author(s):  
Herma Wiharno
Keyword(s):  
Financial Literacy ◽  
Financial Management ◽  
Financial Education ◽  
Civil Servants ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Sample Collection ◽  
Socioeconomic Characteristics ◽  
Units Of Analysis ◽  
Education Levels

The purpose of this study was to assess the socioeconomic characteristics that influence financial literacy and the influence of financial literacy towards personal financial management. The financial literacy in this study was divided into dimensions of financial literacy, financial behavior, and financial attitudes.The method used is descriptive and verificative methods. This research was conducted in the Kuningan Regency, and the Regional Civil Servants were the units of analysis. The samples used in this study were 390 Regional Civil Servants with the sample collection technique of proportional stratified cluster random sampling.The results of the verificative analysis revealed that only education levels significantly affect the financial knowledge, while having a significant effect on the behavior and attitudes in addition to the level of financial education is also a place to stay. Financial knowledge, financial behaviors, and financial attitudes significantly influence towards the personal financial management. In relation between socioeconomic characteristics with personal financial management, education level only that significant effect on personal financial management.

scholarly journals DETERMINANTS OF THE LEVEL OF FINANCIAL LITERACY IN TURKEY

2021 ◽  
Vol 10 (1) ◽  
pp. 9-30
Author(s):  
Hatice Düzakın ◽  
Süreyya Yılmaz
Keyword(s):  
Financial Literacy ◽  
Household Income ◽  
Logit Model ◽  
Demographic Variables ◽  
Financial Knowledge ◽  
Explanatory Variables ◽  
Status Number ◽  
Literacy Level ◽  
Financial Behaviour ◽  
And Gender

The main objective of this study was to explain individuals’ financial literacy levels through socioeconomic and demographic variables. A random sample of 1000 participants was recruited from Turkey. As an indicator of the financial literacy level, a measure with three constructs was adopted: financial attitude, financial behaviour and financial knowledge. Logit model was estimated from these explanatory variables: gender, age, marital status, number of family members, education, income, number of persons with income, household income and working conditions. In the logit model results, the effect of gender, age and education was statistically significant and positive. The results emphasized that there is a relationship between financial literacy level and gender, age and education. Additionally, the results of this study indicated that the level of financial literacy is 52.9% in Turkey.

Financial literacy and financial behaviour: a bibliometric analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kavita Karan Ingale ◽  
Ratna Achuta Paluri
Keyword(s):  
Bibliometric Analysis ◽  
Financial Literacy ◽  
Web Of Science ◽  
Empirical Work ◽  
Financial Education ◽  
Intellectual Structure ◽  
Science Mapping ◽  
Content Type ◽  
Financial Behaviour ◽  
The Web

PurposeNumerous exploratory, conceptual and empirical enquiries on financial behaviour and literacy have been conducted in the areas of economics, finance, business and management. However, no attempt was made to present a comprehensive science mapping of the area so far. Hence, the study intends to elicit the trend in the research field through synthesis of knowledge structures.Design/methodology/approachBibliometric analysis in the field of financial literacy and financial behaviour was performed on a sample of 1,138 documents based on a scientific search strategy run on the Web of Science database for the period 1985–2020. Biblioshiny, which is a web-based application included in Bibliometrix package developed in R-language (Ariaa and Cuccurullo, 2017), was used for the study. With the help of automated workflow in the software, prominent journals, authors, countries, articles, themes were identified; and citation, co-citation and social network analysis were conducted.FindingsResults show that the themes of financial literacy and financial behaviour have evolved over a period of time as an interdisciplinary field. In the initial stages, researchers focused on demographic and socio-economic determinants, but gradually the field embraced topics like behavioural and psychological constructs influencing financial behaviour. Along with conceptual structure, this research reveals the intellectual and social structure of the domain. This study provides important insights on areas that need further investigation.Research limitations/implicationsThe current research is a bibliometric analysis and hence limitations related to such studies are applicable. For future researchers to derive a strong conceptual framework, a systematic review of literature would be helpful. Science mapping for this study is limited to the Web of Science database owing to its wider coverage of good quality journals, structured formats which are compatible with the Bibliometrix software.Practical implicationsThe current study provides important insights on financial literacy and financial behaviour and their inter-linkages. It highlights the most addressed issues in the area and leads towards the prospective areas for research. It informs the future researchers about the emergent themes, contexts and possibilities of collaborations in this area by revealing social and intellectual structure of the domain.Social implicationsThe paper can provide important insights for policy formulation in the areas of financial education and literacy.Originality/valueThere has been lot of conceptual and empirical work done in the past, across countries, spanning the disciplines such as economics, finance, psychology and consumer behaviour. A major contribution of this study is that it consolidates fragmented literature in the area, highlights significant sources, authors and documents, while exploring the relation between financial literacy and financial behaviour.

Financial literacy among youth

2018 ◽  
Vol 45 (1) ◽  
pp. 173-186 ◽  
Author(s):  
Neha Garg ◽  
Shveta Singh
Keyword(s):  
Marital Status ◽  
Financial Literacy ◽  
Empirical Studies ◽  
Demographic Factors ◽  
Well Being ◽  
Financial Knowledge ◽  
Content Type ◽  
The World ◽  
Literacy Level ◽  
Financial Behaviour

Purpose The purpose of this paper is to analyse the level of financial literacy among youth in the world based on previous studies. The study, particularly, focus at how socio-economic and demographic factors such as age, gender, marital status and income influence financial literacy level of youth and whether there is any interrelationship between financial knowledge, financial attitude and financial behaviour. Strong endeavour of the world economies to improve the financial well-being of their citizens has contributed to the rising importance of financial literacy as it equips the individuals to take quality financial decisions to enhance their financial well-being. Design/methodology/approach This literature review consists of seven key sections. The first section of this paper reviews the conceptual definitions of youth. Second part summarises the literature on financial literacy. Third, fourth and fifth section summarises the literature on the components of financial literacy, i.e. financial knowledge, financial attitude and financial behaviour, respectively. Sixth section reviews the empirical studies on the influence of socio-economic and demographic factors on financial literacy level. Seventh section summarises the literature on interrelationship between financial knowledge, financial attitude and financial behaviour. Findings The study reveals that the financial literacy level among youth is low across the most part of the world that has become a cause of concern. Also, it has been observed that various socio-economic and demographic factors such as age, gender, income, marital status and educational attainment influence the financial literacy level of youth and there exists an interrelationship between financial knowledge, financial attitude and financial behaviour. Originality/value Youth have to live a longer life ahead, thus, the decisions taken by them are going to affect them for a longer period of time, making it imperative for them to develop an understanding of the world of finance so as to avoid wrong choice of financial products. Thus, financial literacy is of significant relevance. This paper aims to understand the influence of various factors influencing the financial literacy as understanding the factors that contribute to or detract from the acquisition of financial literacy among youth can help in making policy interventions targeted at youth to enhance their financial well-being.

scholarly journals Financial Education of Russians: Classification of Target Groups

2020 ◽  
Vol 16 (2) ◽  
pp. 42-50
Author(s):  
Natal’ya V. Alikperova
Keyword(s):  
Financial Market ◽  
Russian Federation ◽  
Low Income ◽  
Financial Literacy ◽  
Financial Education ◽  
Well Being ◽  
Financial Knowledge ◽  
Target Groups ◽  
The Russian Federation

The Object of the Study. The population of the Russian Federation divided into target groups. The Subject of the Study. Financial education of Russians, taking into account the characteristics of various target groups. The Purpose of the Study. Clarification of target groups of Russian citizens for the implementation of the financial education strategy. The Main Provisions of the Article. In today's reality, financial literacy is becoming a necessary skill for personal and social well-being. In the conditions of active development of the financial market, increasing financial literacy of the population provides citizens with the opportunity not only to effectively use various financial products and services, make profitable economic decisions, but also to be full participants in the entire socioeconomic system of the state. However, currently there is a fairly low level of financial literacy of Russians, and this trend is observed from year to year, due to the complexity of the financial market as a whole, an erroneous idea of the essence of certain concepts, and as a result, the construction of financial strategies in accordance with this understanding, and this may indirectly indicate the inefficiency of the current system for improving financial literacy of Russian citizens. To implement the strategy of improving financial literacy of the population, first of all, it is necessary to clearly understand who will receive the training. It is a well-thought-out classification of target groups that is the basis for building a system of financial education, forming a methodological basis, training specialists to broadcast financial knowledge and creating educational channels. According to the author, it is recommended to clarify and supplement the existing classification of target groups, approved by the current strategy for improving financial literacy in the Russian Federation for 2017-2023, by including such categories of citizens as preschoolers, citizens with disabilities, vulnerable segments of the population (orphans, children in orphanages and boarding schools), as well as to clarify the current structure of the "adult population" group, dividing it into low-income citizens and families, and citizens with medium and high incomes (including families). In addition, it is recommended to divide each target group by the level of available financial knowledge and skills, which will allow you to create a targeted, personalized, thoughtful training system that promotes financial literacy, awareness as well as evaluate the results of such training.

scholarly journals Financial Literacy: The Case of Poland

2019 ◽  
Author(s):  
Beata Swiecka ◽  
Eser Yeşildağ ◽  
Ercan Ozen ◽  
Simon Grima
Keyword(s):  
Financial Literacy ◽  
Financial Management ◽  
Financial Knowledge ◽  
Economic Indicators ◽  
Financial Sustainability ◽  
Small Step ◽  
Financial Decision ◽  
Financial Behaviour ◽  
Definition Of ◽  
National Economies

Financial literacy is a path to sustainability and has an important role in ensuring the financial sustainability of individuals, families, enterprises and national economies. The level of these economic indicators such as debt, payment discipline, savings and financial management all translate into prosperity or insolvency and bankruptcy and result partially from financial literacy. The higher the level of financial literacy, especially of young people, the more favorable the level of economic indicators, which translates into the economy and sustainable development. However, despite many years of research, there is still a lack of a uniform and coherent definition of financial literacy, as well as methods for measuring it. This study offers a small step forward, presenting the authors’ own view of the concept of financial literacy, the conceptualizations of financial literacy and methods used for investigating. Moreover, they present the results of a survey conducted on the financial behaviour, financial attitudes, and financial knowledge of the Polish youth and compare this to a PISA study on 15-year-old students. Results demonstrate a good, and partially very good, level of financial literacy among young Poles, showing that they are rational in their financial decision making.

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