scholarly journals Financial Literacy and Financial Wellbeing of Public Sector Employees: A Critical Literature Review

2017 ◽  
Vol 13 (16) ◽  
pp. 233 ◽  
Author(s):  
Margaret Gatuiri Kamakia ◽  
Cyrus Iraya Mwangi ◽  
Mirie Mwangi
Keyword(s):  
Literature Review ◽  
Financial Markets ◽  
Financial Literacy ◽  
Positive Relationship ◽  
Financial Decisions ◽  
Moderating Variables ◽  
Pension Schemes ◽  
Public Sector Employees ◽  
Financial Decision ◽  
Critical Literature

There is a great concern from researchers, government, and professional bodies about how consumers, households, students and employees manage their finances. A great number of people from both developed and developing countries are reported to be financially illiterate. Employees today are facing serious challenges in financial decision making that seems to emanate from the changes in financial markets and in social security pension schemes. They have access to financial literacy sessions at their workplaces yet this is not always reflected in the kind of lives they live. This provokes the question ‘does a more financially literate employee enjoy better financial wellbeing than a less literate person?’ The current study therefore seeks to critically review the literature to establish the documented relationship between financial literacy and financial wellbeing and possible intervening and moderating variables. The existing literature gaps are identified and recommended for further research. The results from the literature review indicate that financial literacy and financial wellbeing are defined and measured differently. Additionally, there seem to be a positive relationship between financial literacy and financial wellbeing but this relationship is intervened and moderated by financial decisions and demographic factors respectively.

Trust and Household Portfolios

2021 ◽  
pp. 78-97
Author(s):  
Diego Lubian
Keyword(s):  
Financial Markets ◽  
Empirical Evidence ◽  
Financial Literacy ◽  
Risky Assets ◽  
Financial Decisions ◽  
Portfolio Decisions ◽  
Financial Decision ◽  
Financial Portfolio ◽  
Socio Demographic Factors ◽  
The Relationship

This article provides empirical evidence on the existence and the extent of the influence of trust in financial decisions using individual data on Italian households from the Survey on Household Income and Wealth, 2010. This article studies the relationship between, trust in people, trust in banks and more detailed previously unexplored dimensions of trust, and household financial portfolio decisions. The article provides empirical evidence that trust in people and trust in banks affect both participation in financial markets, the share of risky assets and the diversification of the financial portfolio, controlling socio-demographic factors, risk aversion, and financial literacy as well. The article finds that trust is important for individuals with a lower level of education who have limited possibilities to acquire and process information on financial markets need to rely in trustworthy relationship to define their financial portfolio. Further, we present evidence that the main channel by which trust affects financial decision making and determines too little participation, a lower share of risky assets in the financial wealth and poorly diversified portfolios is trust in family and friends.

Trust and Household Portfolios

2020 ◽  
Vol 9 (1) ◽  
pp. 8-26
Author(s):  
Diego Lubian
Keyword(s):  
Financial Markets ◽  
Empirical Evidence ◽  
Financial Literacy ◽  
Risky Assets ◽  
Financial Decisions ◽  
Portfolio Decisions ◽  
Financial Decision ◽  
Financial Portfolio ◽  
Socio Demographic Factors ◽  
The Relationship

This article provides empirical evidence on the existence and the extent of the influence of trust in financial decisions using individual data on Italian households from the Survey on Household Income and Wealth, 2010. This article studies the relationship between, trust in people, trust in banks and more detailed previously unexplored dimensions of trust, and household financial portfolio decisions. The article provides empirical evidence that trust in people and trust in banks affect both participation in financial markets, the share of risky assets and the diversification of the financial portfolio, controlling socio-demographic factors, risk aversion, and financial literacy as well. The article finds that trust is important for individuals with a lower level of education who have limited possibilities to acquire and process information on financial markets need to rely in trustworthy relationship to define their financial portfolio. Further, we present evidence that the main channel by which trust affects financial decision making and determines too little participation, a lower share of risky assets in the financial wealth and poorly diversified portfolios is trust in family and friends.

scholarly journals Gender Differences in Financial Decisions

2018 ◽  
Vol 11 (1) ◽  
pp. 21-27
Author(s):  
Jeetendra Dangol
Keyword(s):  
Gender Differences ◽  
Decision Making ◽  
Financial Literacy ◽  
Sampling Technique ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Convenience Sampling ◽  
Risk Taker ◽  
Survey Questionnaires

This paper examines the gender differences in financial decision-making of university students who are young, single, childless individuals that have at least average financial literacy and very small or no income. This paper is based on the survey questionnaires developed by Grable and Lytton (2003), distributed and collected from 100 students (50 men and 50 women) by using convenience sampling technique. The study finds that men and women differ in their financial decision. Women are less risk taker than men in financial decision-making; it indicates that women prefer to safer investment.

scholarly journals Why Do Financial Literacy Programmes Fail?

2013 ◽  
Vol 2 (1) ◽  
pp. 18
Author(s):  
Bart Frijns ◽  
Aaron Gilbert ◽  
Alireza Tourani-Rad
Keyword(s):  
Decision Making ◽  
Causal Relationship ◽  
Financial Literacy ◽  
Positive Relationship ◽  
Financial Knowledge ◽  
Financial Decision Making ◽  
Financial Decision

Numerous studies have found a positive relationship between financial literacy andfinancial experience. Typically, this relationship is interpreted as being a causal relationship,i.e. an increase in financial literacy leads to better financial decision making. However, asimple relationship cannot be interpreted in a causal way. In this paper, we show evidencefor a causal relationship running the opposite way, i.e. people with more financial experienceseem to acquire more financial knowledge and become more financially literate. Thisfinding has important implications as it suggests that programmes targeted at improvingfinancial literacy could be more effective if they incorporate experiential components.

Financial literacy training programs and financial behaviour: Why people do not become “financially literate”?

2020 ◽  
pp. 80-93
Author(s):  
D. V. Kislitsyn
Keyword(s):  
Financial Literacy ◽  
Financial Behavior ◽  
Literacy Programs ◽  
Financial Decisions ◽  
Financial Decision ◽  
Improvement Programs ◽  
The Government ◽  
Low Efficiency ◽  
Economic Understanding

The paper takes a critical view on the prevalent approaches to developing financial literacy programs. It has been shown that meta-analytical and review studies indicate low efficiency of financial literacy improvement programs: their effect on financial behavior is either statistically insignificant or statistically significant, but practically negligible. Among potential reasons of financial literacy programs low efficiency the role of behavioral factors in financial decision making and the impossibility of determining “financially literate” behavior from the perspective of an outside observer are considered. It is concluded that the currently dominant criteria for assessing financially competent behavior can be characterized either as procedural, within which not the consequences of financial decisions are considered, but how consciously they are taken, or as normative, within which the government differentiates the consumers attitudes into wrong and right. Both groups of criteria are based on a non-economic understanding of rationality.

scholarly journals A System to Support the Transparency of Consumer Credit Offers

2020 ◽  
Vol 13 (12) ◽  
pp. 317
Author(s):  
Bożena Frączek
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
Financial Literacy ◽  
Consumer Credit ◽  
Calculation Methods ◽  
Financial Decisions ◽  
Low Level ◽  
Lack Of Information ◽  
Responsible Lending ◽  
Human Thinking

The development of financial markets and the low level of financial literacy does not facilitate consumer protection. A significant problem is the lack of information or unclear information regarding financial offers, including consumer credit. Financial protection for consumers can be increased by using systems that support consumers faced with a lack of transparency of consumer credit offers. The theoretical objective of the research is to identify the completeness of information allowing for verifying the annual percentage rate (APR) in the consumer credit offers presented and compared on websites of financial intermediaries and banks as well as the identify of APR calculation methods. After analysis of different credit offers (document analysis), a prototype of the system regarding credit costs measured at the appropriate interest rates (APR and AER) calculated in the correct manner was created. This may facilitate practices for informing consumers about the characteristics of consumer credit and at the same time support the implementation of the concept of responsible lending. The system developed uses a computer to simulate human thinking and to augment it with artificial intelligence. It facilitates the elimination the behavioral biases during the taking of financial decisions, which are the result of a low level of financial literacy.

scholarly journals The role of the brain in financial decisions: A viewpoint on neuroeconomics

2018 ◽  
pp. 6
Author(s):  
Guillermo Mateu ◽  
Lucas Monzani ◽  
Roger Muñoz Navarro
Keyword(s):  
Decision Making ◽  
Financial Markets ◽  
Brain Activity ◽  
Financial Decisions ◽  
Main Research ◽  
Economic Decisions ◽  
Decision Making Processes ◽  
Financial Decision ◽  
The Brain

In this article, we explain the important role neuroscience plays in economic and financial environments. Hence, we present neuroeconomics as a way to describe how decision-making processes affect brain activity, focusing especially on the importance of economic and financial decisions. We answer some questions regarding the role of emotions in finance, the psychological factors present in financial markets, and how neuropsychological stimuli affect our economic decisions. We conclude by citing the main research in the area of neuroscience in financial decision-making processes, and highlight further research projects in these areas.

scholarly journals MILLENNIALS: THEIR FINANCIAL LITERACY AND DECISION MAKING

2020 ◽  
Vol 1 (3) ◽  
pp. 326-340
Author(s):  
Arie Widyastuti ◽  
Ratna Komara ◽  
Layyinaturrobaniyah Layyinaturrobaniyah
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Credit Card ◽  
Significance Level ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Demographic Profiles ◽  
Gender Education ◽  
Financial Decision ◽  
Mother Education

Millennials are now the largest population groupings in Indonesia, therefore their decisions in financial matters have significant implications for themselves as well as the country’s economy. This paper is aimed to evaluate the level of financial literacy possessed by the Millennials and their attitudes towards making key financial decisions. Data were collected through questionnaire of 30 questions with 15 questions regarding financial literacy and 15 questions related to financial decision making, with the participants in the study consists of 446 individuals who were born from 1980s to 2000s. The result reveals that better financial literacy leads to better financial decision at 1% significance level. This study also indicates that, although demographic profiles such as gender, education, length of working experience, income, number of credit card ownership and mother education have positive correlation with the level of financial literacy, they do not have moderating effect to the financial literacy and financial decision making of the millennials

scholarly journals Individual Investors' Financial Behaviour and Financial Attitude: Role of Financial Literacy as Moderator in Decision Making

2021 ◽  
Vol VI (I) ◽  
pp. 200-213
Author(s):  
Sadaf Ambreen ◽  
Laiba Khalid ◽  
Aniqa Zubair
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Financial Management ◽  
Individual Investors ◽  
Individual Investor ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Financial Management System

As an individual investor, it is incredible to have a successful performance return without financial knowledge. An organization's performance must be measured and analysed based on an adequate financial management system. In today's multifaceted financial scenery Financial Literacy is crucial as it does not only impact financial decisions at the business level but is also important for the country's development. Financial literacy has the importance of the backbone of society. The study adds a new mechanism of financial literacy. The main objective of this study is to determine further insight into the role of financial literacy on an individual's behaviour and attitude towards financial decision making. For analysis, the moderator impact of financial literacy on decision-making data of 100 individual investors has been collected from different banking sectors of Pakistan. The result of this study shows that financial literacy has a significant impact on financial decision making. This study delivers knowledge that can contribute to guiding coming studies, making policies, directors and instructors in their teaching.

scholarly journals Financial literacy and the use of financial services in Serbia

2021 ◽  
pp. 105-114
Author(s):  
Slađana Barjaktarović-Rakočević ◽  
Nela Rakić ◽  
Marina Ignjatović ◽  
Milica Stevanović
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Financial Education ◽  
Middle Income ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Products ◽  
Decision Making Processes ◽  
Financial Decision ◽  
The Government

Financial services industry has always drawn a lot of attention, from possible investors, those who need financing, the government and general public. Globally, financial opportunities are becoming more attractive, but also more complex. The goal of this study is to analyze the use of financial services in Serbia. We argue that financial education and literacy are preconditions for the use of financial opportunities. Research has shown that people in Serbia are not well informed about how to make sound financial decisions. The reasons why people in Serbia do not use financial products requires to a greater extent and services special attention. In order to test the differences between people in terms of how well informed they are and which services they use and why, we conducted a survey. Our results show that people with salaries higher than 100,000 RSD are well informed but not motivated to invest. Individuals with middle income do not have enough trust and think that they are not well informed about different opportunities. Additionally, we found that men are better informed than women. This paper aims to provide an overview of the use of financial services in Serbia in order to improve financial decision-making processes and understand the different financial opportunities.

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