Abstract
The current financial service market is complex and offers consumers a vast array of products and services to meet their financial needs. The degree of choice requires that consumers be equipped with the financial knowledge and skills to evaluate the options available in the market. Studies on the effects of financial on personal financial decisions indicate contradicting results. This study was carried out to establish the effect of financial literacy on personal financial decisions among Egerton University employees. The study was guided by the general objective of examining the effects of financial literacy on personal financial decisions. Specifically: to determine the effect of financial knowledge on personal financial decisions, to determine the effect of financial skills on personal financial decisions and to determine the effect of financial attitude on personal financial decisions. The study adopted the descriptive survey research design. The population of the study consisted of all Egerton University employees consisting of top management, middle level staff who include technical, administrative and teaching staff and lower level staff. A sample of 320 respondents was determined using sample determination table. The target sample size determined was drawn proportionately from each management level. A random sample from each stratum was taken in a number proportional to the stratum’s size when compared to the population. Primary data was collected through structured questionnaires. Data validity and reliability was checked by pilot testing and by use of Cronbach Alpha (0.876). Data was analyzed using descriptive statistics, Pearson correlation and multiple regression analysis with the help of Statistical package for Social Sciences (SPSS). Findings revealed that financial knowledge and financial skills were significant in determining personal financial decisions while financial attitudes did not influence significantly personal financial decisions. Overall the effect of financial literacy was found to have a positive statistically significant relationship with personal financial decisions. The study recommendations include: Financial education on financial products available in the market especially on mortgage, stocks and shares and investment accounts; provision of financial education programs to employees to enhance their financial skills and concerted efforts to inculcate appropriate attitude to translate acquired financial skills into practice and decisions-making among the employees.
Highlights
The global marketplace has become increasingly risky and unpredictable
With respect to the level of financial literacy among employees, based on the components of financial literacy (Financial knowledge, financial skills, financial attitude), table 2 gives the overall index. These findings indicate that level of financial literacy among employees was generally as evidenced by average at 3.3 on a 1 to 5 rating
The main purpose of the study was to evaluate the effect of financial literacy and personal financial decisions among employees of Egerton University, Nakuru County
Summary
The global marketplace has become increasingly risky and unpredictable. It affects the nations and the societies and its main implications include rising costs of goods and services that push people to make well-informed financial decisions [8]. Financial literacy has immeasurable significance to both individuals and institutions according to [9]. Anne Wangeci Mwathi et al.: Effects of Financial Literacy on Personal Financial Decisions Among Egerton. On the market level informed consumers play a developmental and monitoring role in the market by weeding out bad practices and providers
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