Financial Literacy and Consumer Debt: A Survey of Low Income Households in Depok, West Java, Indonesia

Intertemporal savings strategies, such as bulk buying or accelerating purchase timing to take advantage of a good deal, provide long-term savings in exchange for an increase in immediate spending. Although households with limited financial resources stand to benefit the most from these strategies, they are less likely to make use of them. The authors provide causal evidence that liquidity constraints impede low-income households’ ability to use these strategies, above and beyond the impact of other constraints. Exploiting recurring variation in household liquidity, this study shows that when low-income households have more liquidity, they partially catch up to higher-income households’ ability to use intertemporal savings strategies. The findings provide guidance to marketing managers and researchers regarding targeted promotional design and measurement of deal-proneness. For policy makers, they suggest a new path for decreasing the higher prices low-income households have been documented to pay for everyday goods. Policies have traditionally focused on increasing financial literacy or access to supermarkets. Our work suggests that providing greater liquidity can help low-income households make better use of savings opportunities already available to them.

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Financial Literacy and Stokvels Savings of Low-Income Households in South Africa

International Journal of Economics and Business Administration ◽

10.35808/ijeba/738 ◽

2021 ◽

Vol IX (Issue 4) ◽

pp. 130-139

Author(s):

Lindiwe Ngcobo

Keyword(s):

South Africa ◽

Low Income ◽

Financial Literacy ◽

Low Income Households

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Financial literacy and over-indebtedness in low-income households

International Review of Financial Analysis ◽

10.1016/j.irfa.2016.08.004 ◽

2016 ◽

Vol 48 ◽

pp. 1-11 ◽

Cited By ~ 19

Author(s):

Declan French ◽

Donal McKillop

Keyword(s):

Low Income ◽

Financial Literacy ◽

Low Income Households

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Financial Literacy and Over-Indebtedness in Low-Income Households

SSRN Electronic Journal ◽

10.2139/ssrn.2505084 ◽

2014 ◽

Author(s):

Declan French ◽

Donal G. McKillop

Keyword(s):

Low Income ◽

Financial Literacy ◽

Low Income Households

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The effectiveness of a financial literacy and job-readiness curriculum for youth from low-income households

Citizenship Social and Economics Education ◽

10.1177/20471734211051770 ◽

2021 ◽

pp. 204717342110517

Author(s):

Diana Cedeño ◽

Daniel G. Lannin ◽

Luke Russell ◽

Ani Yazedjian ◽

Jeremy B. Kanter ◽

...

Keyword(s):

Low Income ◽

Financial Literacy ◽

Policy Implications ◽

Financial Behaviors ◽

Job Readiness ◽

Targeted Interventions ◽

The Road ◽

Work Related ◽

Literacy Knowledge ◽

Low Income Households

Intergenerational poverty and scarce financial resources can create and sustain detrimental behaviors and outcomes among adolescents. Efforts to increase financial literacy and job-related skills, however, can offer youth from low-income households knowledge, skills, and opportunities otherwise unavailable to them. Targeted interventions that combine financial literacy and job-readiness components may help adolescents disrupt the cycle of intergenerational poverty by increasing economic awareness, adaptive financial behaviors, and work-related skills. Drawing on career construction and asset theory, the present study examined changes in financial knowledge and labor skills among youth from low-income households (N = 111) over the course of their participation in the Road to Success curriculum as well as how changes varied across demographic characteristics of participants. Data analysis included descriptive statistics, t-test analyses, and MANCOVA. Results indicated several improvements from Wave 1 to Wave 2 as students developed job-readiness and financial literacy knowledge. Potential educational and policy implications are discussed.

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