The cash vs. digital Paradox: Why financial literacy matters in uncertain times

The definition of financial and legal literacy is still evolving. In today's uncertain times, it is particularly important to define and understand financial and legal literacy correctly. Their focus is seemingly different but they have much in common. Lack of legal literacy can affect financial behaviour and contribute to increasing financial insecurity. According to research, respondents with different levels of legal literacy exhibit different legal behaviours. A properly established measurement of these two areas is the basis for their awareness and proper use in future decision-making. However, we need to know whether and which methods can be used to examine the level of financial and legal literacy in society, and for what purpose they will be composed. The aim is to help quantitative research to find a method of investigation such that its measures assess the level of both financial and legal literacy. The methods are presented to highlight the possible shortcomings and limitations of these methods, and the interpretation of the indicators and results.

This study aims to explore the role of financial literacy in determining financial well-being during COVID-19. Additionally, we plan to examine how risk tolerance mediates between financial literacy and overall well-being. The data of 367 active individual investors on the Pakistan Stock Exchange was taken utilizing convenience sampling and the survey methodology. The relationship between financial literacy, risk tolerance, and financial well-being was investigated using structural equation modeling. The data were analyzed through Smart PLS. The finding of the study highlights that both advance and basic financial literacy have a positive and significant association with investor well-being. Furthermore, financial literacy has a favorable indirect impact on financial well-being highlighted in this study through risk tolerance. The effect of financial literacy on financial well-being was remarkably consistent across levels of demographic variables such as education, gender and age suggesting that improving financial literacy levels in the population may be an effective strategy to increase financial capability across the board during the COVID-19 crisis. The outcome of the study has several policy implications for investors and policymakers during uncertain times such as COVID-19, as providing literacy positively contributes to their risk tolerance which then translates into higher financial well-being. The paper’s novelty is that the authors have explored the mechanism by which basic and advanced levels of financial literacy influence investors’ risk tolerance and financial well-being during the COVID-19 pandemic in an emerging economy. It adds to the literature in behavioral finance, explicitly probing the impact of financial literacy on financial well-being; this field is in its initial stage, even in developed countries, while little work has been done in emerging countries. JEL Classification: B21, D01, D91, G11, J26, H31.

Since the financial crisis financial literacy has attracted growing interest among researchers and policy makers, as there is international empirical evidence that financial literacy is poor among both adults and students. In Germany we have almost no empirical evidence on financial literacy, especially in the case of students attending secondary schools, as financial education has not featured on German school curricula to date. Besides, Germany has not yet participated in the optional financial literacy module of PISA, which was offered for the first time in 2012. However, a lack of private pension provisioning, in spite of demographic change, and low stock ownership among German households indicate a deficit in financial knowledge and skills in this country as well. In this paper we investigate financial literacy among students aged 14 to 16 attending a secondary school in the state of Hesse. The foundation is a test designed according to international standards. The statistical analysis of the test reveals substantial deficits in key areas of financial literacy. Particular deficits could be identified in the fields of basic knowledge of financial matters and, to an even greater degree, in more advanced concepts such as risk diversification. Applying interest calculations to financial matters turned out to be problematic for many students. Furthermore, the paper analyses the impact of gender and type of school on the overall test score as well as test performance in specific tasks. The findings suggest that financial matters should be covered in some form at secondary schools. In light of the potentially far-reaching consequences of financial illiteracy for financial wellbeing, German participation in future PISA financial literacy tests seems highly advisable to gain a deeper understanding of the preliminary findings presented in this paper.

Since the financial crisis financial literacy has attracted growing interest among researchers and policy makers, as there is international empirical evidence that financial literacy is poor among both adults and students. In Germany we have almost no empirical evidence on financial literacy, especially in the case of students attending secondary schools, as financial education has not featured on German school curricula to date. Besides, Germany has not yet participated in the optional financial literacy module of PISA, which was offered for the first time in 2012. However, a lack of private pension provisioning, in spite of demographic change, and low stock ownership among German households indicate a deficit in financial knowledge and skills in this country as well. In this paper we investigate financial literacy among students aged 14 to 16 attending a secondary school in the state of Hesse. The foundation is a test designed according to international standards. The statistical analysis of the test reveals substantial deficits in key areas of financial literacy. Particular deficits could be identified in the fields of basic knowledge of financial matters and, to an even greater degree, in more advanced concepts such as risk diversification. Applying interest calculations to financial matters turned out to be problematic for many students. Furthermore, the paper analyses the impact of gender and type of school on the overall test score as well as test performance in specific tasks. The findings suggest that financial matters should be covered in some form at secondary schools. In light of the potentially far-reaching consequences of financial illiteracy for financial wellbeing, German participation in future PISA financial literacy tests seems highly advisable to gain a deeper understanding of the preliminary findings presented in this paper.

Increasing personal financial responsibility has increased the value of financial literacy in recent decades, leading to an emphasis on financial literacy and educational programs. However, these educational efforts have demonstrated mixed results, necessitating further research regarding the influences on personal financial knowledge and capabilities. The present study explores the effect of family socialization, specifically through an analysis of family communication patterns and privacy orientations, hypothesizing that open dialogue regarding financial matters will encourage transmission of knowledge and a willingness to seek information when needed. Reporting on the results of an online survey of college students, the results imply that individuals from more communicative families report stronger financial literacy. This finding suggests that financial literacy education programs might be more pedagogically useful if they incorporate and facilitate conversation around financial matters. The findings also reinforce the necessity of financial education.

A person’s level of knowledge, especially millennial generation (young people), regarding financial matters will definitely make life easier when making daily financial decisions. In the process, financial literacy can play major role. The aim of this research is to determine financial literacy and its impact on the financial behavior of generation Z in West Bandung Regency. The method used in this research is a descriptive quantitative method. The research results show that financial literacy has a significant impact on financial behavior in financial efficacy, investment knowledge, and debt management.A person’s level of knowledge, especially millennial generation (young people), regarding financial matters will definitely make life easier when making daily financial decisions. In the process, financial literacy can play major role. The aim of this research is to determine financial literacy and its impact on the financial behavior of generation Z in West Bandung Regency. The method used in this research is a descriptive quantitative method. The research results show that financial literacy has a significant impact on financial behavior in financial efficacy, investment knowledge, and debt management.

The first 8 years of the new millennium witnessed one of the largest construction booms in healthcare since the 1950s, and until the bottom dropped out of the economy in fall of 2008, no one expected the boom end anytime soon. According Jennings and Hughes (2009), $41 billion were invested in hospitals and clinics, and an estimated $40.7 billion-worth of construction was underway by the fourth quarter of 2008. It was estimated that by 2020, $200 billion would be spent for healthcare facility construction. With the huge declines in the stock market, the credit crisis that has all but eliminated lowcost borrowing, states threatening bankruptcy, and the possibility of radical healthcare reform, uncertainty about the future now prevails. All healthcare system leaders have had re-examine their priorities and their approach capital allocations for improvements in the physical plant, equipment, technology, electronic medical records systems, and information systems. Some board members and executive teams have elected complete projects already in progress, while others have put the brakes on planned projects with indefinite completion dates preserve cash, reassess financial capabilities, leverage existing capital investments, and focus on core operations sustain operating margins.These uncertain times have challenged both the healthcare industry and the field of healthcare design and construction. We feel uncertain as we anticipate and consider new government regulation of healthcare, changes in the payer industry, competitor strategies that can affect market share, proposed staffing ratios legislated for nurses, emerging technologies, and of course, the national economy (Jennings & Hughes, 2009). Executive teams find themselves in the throes of managing the impossible, making decisions without all of the necessary data, and taking calculated risks while confronting a very obscure future. Not only do they wrestle with the question of to build or not build, but also how access capital in an uncertain market and how cut the costs of existing and projected capital projects minimize overall financial exposure. All the while, healthcare leaders also grapple with the potential longterm risks of not investing in capital projects.Capital Planning and Debt FinancingHealthcare construction projects can be financed in a number of ways-bond investors (retail and institutional) commercial banks and direct lenders (off-balance-sheet lenders, secured lending companies, and equipment leasing companies) name a few-but all require a good bond rating from rating agencies such as Fitch, Moody's, and Standard & Poor's. Unfortunately, credit rating downgrades for healthcare organizations have significantly outpaced upgrades since 2006, which dramatically affects hospitals' bond ratings and credit interest rates (Zieger, 2008). Certainly, credit-worthy organizations have improved capital market opportunities such as access loans and lines of credit from commercial banks, flexible financing options, and less restrictive bond documents and operating covenants, but in the current tight market where uncertainty prevails, even credit-worthy organizations are struggling finance their major expansion or replacement projects (Hemker, 2008). …

With the growth of the economy and finance, the requirement of financial literacy has increased, technology has made the financial ecosystem so fast that in order to keep up with the changes a person needs to passively enhance his knowledge in matters of finance. Financial literacy enables a person to manage their finances with greater efficiency. The motive of this research project was to assess the financial literacy level of the millennial generation of the population of Lucknow. The study aims to identify whether there prevails any difference in the levels of financial literacy among the male and female population of millennials in the city. This comparative study is based upon primary data which was collected through a questionnaire developed by the Organization for Economic Co-operation and Development - International Network on Financial Education (OECD-INFE).The criterion for measuring financial literacy is based upon three variables for determining it, namely, financial knowledge, financial behavior and financial attitude. These variables have been suggested by the OECDin their methodology for measuring financial literacy. Half of the respondents have low financial knowledge, females have comparatively lower financial knowledge than males, majority of respondents showed positive financial behaviour, male showed higher positive financial behaviour in comparison to females, The financial attitude of the millennials is not very significant, This research can be used for formulation of financial inclusion programmes, the findings of this research can be helpful in determining techniques to improve the financial literacy as well as to identify the causes or factors contributing towards low financial literacy.

Financial Literacy - The Demand Side of Financial Inclusion

PurposeThis study aims to test a moderated mediation model for a twofold purpose. First, to examine the mediating role of financial capability (FC) in the association between financial literacy (FL) and financial well-being (FW). Second, to analyze if non-impulsive future-oriented behavior (NIB) moderates the associations of FL with FC and FL with FW.Design/methodology/approachThe authors use the PROCESS macros in IBM SPSS Statistics to test the moderated mediation model and analyze the 2016 wave of the Household, Income and Labor Dynamics in Australia Survey.FindingsThe empirical analysis shows that FC partially mediates the association between FL and FW. Furthermore, the moderated mediation analysis shows that NIB strengthens the associations of FL with FC and FL with FW. Specifically, the positive associations of FL with FC and FL with FW significantly increase for those consumers who score high on NIB.Practical implicationsThe findings have implications for the financial services industry. Professional financial planners can positively improve the ability of consumers to deal with their financial matters by highlighting the importance of FL and NIB.Social implicationsThe study findings suggest educating consumers to discourage impulsive behavior and encourage them to create financial plans as it will enhance their ability to conduct financial tasks efficiently, improving their FW.Originality/valueTo the authors’ knowledge, this is the first study to assess a moderated mediation model, which examines the role of FC as a mediator variable and NIB as a moderator variable in the association between FL and FW.

Over the recent years, taxation literacy has become a major area of concern for governments, banks, community service groups, other similar organizations, and people in India. People largely lack basic knowledge about financial matters, required to take household decisions, day-to-day money management as well as saving for the long term. Taxation literacy is defined as the knowledge which an individual should possess to manage the issues concerning personal taxation effectively. It helps the individuals in assessing their tax liability, tax management, and tax planning too. Lack of financial and taxation literacy often makes people vulnerable to a financial crisis. It also adversely affects market operations and competitive forces. On the other hand, people who are well informed and well knowledgeable can help to create a more competitive and more efficient financial and tax planning system. The basic purpose of this study is to determine the relationship between financial and taxation literacy among the people, the impact of various government awareness programs on salaried individuals. An illiterate person may arise issues related to tax evasion which is illegal in Indian perspectives. Descriptive type of research will be used to describe the meaning of taxation literacy and review various research papers. Data will be collected from secondary sources. The later section of this review paper observes the views of the different researchers on taxation literacy and will give valued suggestions and future viewpoints on the same. KEYWORDS: Taxation Literacy, Financial Literacy, Tax Management, Tax Planning, People

There is no substantial evidence that exists in the literature to establish the link between financial advice and financial capability fully establishes, even though ‘getting help’ is identified as an important aspect of financial capability. This study sets out to fulfil a couple of objectives. Its primary goal is to investigate the effects that a combination of financial literacy elements (financial attitude, financial knowledge, and financial behaviour), financial advice as well as financial satisfaction have on individuals’ financial capability, and secondly, to test and prescribe the improved scale of financial capability measurement. This research has been administered in Spain at an individual level. Hierarchical regression method along with Z-test were used. Regressions’ outcomes reveal that financial constructs positively impact the individuals’ financial capability. From the viewpoint of policymakers, it is vital to fully comprehend the significant factors influencing financial capability to plan better strategies to empower the citizens with adequate skills, abilities, and behaviour so to succeed in dealing with financial matters in daily basis. The originality and value added to the present study is two-fold. Firstly, it comprehensively examines the wide-ranging financial indicators seen as critical in determining financial capability, which remain yet not quite covered in other studies. Second, both indicators used to measure the financial capability revealed no substantial differences, therefore an improved composite scale is prescribed as useful in measuring financial capability in future research.

The article proves the need to master the financial literacy base for all segments and categories of citizens (pupils, students, adults), establishes the interest of the state and financial institutions, in particular in the financial literacy of its citizens, the impact of the level of population’s financial literacy on the development of the financial market, the shadow economy, the attitude of the population of Ukraine to reforms and government initiatives. It is determined that due to insufficient competence in financial matters and insufficient financial literacy Ukrainians suffer from lack of funds and actions of fraudsters. It has been established that Ukrainians focus on the short-term perspective - they live in the present and do not save for the future. It has been conducted a study of the state of financial literacy of Ukraine, as well as comparing it with domestic experience. An analysis of the national financial literacy survey was conducted, which calculated the OECD Financial Literacy Index for Ukraine, and the results were compared with thirty other countries. It is established that financial literacy is one of the components of financial well-being of the population. The main factors that affect the well-being of the population of Ukraine are identified: the availability of control over expenditures, loans for everyday needs. The reasons for low financial literacy of the population of Ukraine have been identified (lack of training of Ukrainian citizens on the basics of financial literacy; improper provision of quality financial information to potential consumers of financial services; failure of the majority of the population to understand financial knowledge as necessary; low level of material and financial well-being of the majority of the population of Ukraine; lack of a single organization (at the level of the National Bank of Ukraine and the Ministry of Finance of Ukraine) which would promote financial literacy of the population; lack of approved university and school programs that would teach students the basics of financial literacy in a market economy). It is proposed to create a new program, which would be solved by the state with the support of financial organizations and business structures.

Purpose The purpose of this paper is to establish the mediating effect of financial literacy in the relationship between institutional framing and financial inclusion among poor households in Uganda with a specific focus on Mokono district. Design/methodology/approach The study adopted a cross-sectional design. Data were analyzed using structural equation modeling (SEM), which adopted Analysis of Moment Structures to test for mediating effect of financial literacy in the relationship between institutional framing and financial inclusion. Findings The results revealed that financial literacy had a partial mediating effect in the relationship between institutional framing and financial inclusion. Furthermore, the results indicated that while institutional framing has a direct effect on financial inclusion, it also exerts an indirect effect through financial literacy. This supports the argument that institutional framing that structure the way how poor households interpret, evaluate, comprehend and make sound financial decisions and choices, is enhanced by knowledge and skills acquired through financial literacy by poor households. Research limitations/implications This study has been limited by adopting only cross-sectional design and quantitative research approach, therefore ignoring longitudinal design and qualitative research approach. Besides, the study uses SEM bootstrap approach and ignores MedGraph method, which is also recommended for testing mediation. Practical implications Since the results suggest that institutional framing of poor households are partially enhanced by financial literacy to increase financial inclusion, policy makers, practitioners and managers of financial institutions should ensure extending financial literacy programs closer to the poor in order to expand the scope of financial inclusion beyond the current sphere. Indeed, financial literacy programs will boost cognitive abilities of poor households resulting into better financial decisions and choices and, hence increase in demand and consumption of financial services. Originality/value The study significantly generates empirical evidence by testing the mediating role of financial literacy in the relationship between institutional framing and financial inclusion using SEM bootstrap approach. The study portrays the influential partial effect of financial literacy in enhancing institutional frames of poor households in order to cause improvement in financial inclusion. Indeed, financial literacy programs that entail acquisition of financial knowledge and skills boost cognitive abilities of poor households to easily interpret, evaluate, comprehend meanings, and take correct decisions and actions on financial matters. The mediating effect of financial literacy in the relationship between institutional framing and financial inclusion seems to be lacking in literature and theory. Thus, the paper is the first to relate the influential partial effect of financial literacy in the relationship between institutional framing and financial inclusion among poor households, especially in a developing country context.

Every Moslem is obliged to be responsible and accountable in every deed done, including the decisions regarding financial matters. As the consequence, every Moslem is required to have ample relevant knowledge in financial issues, or known as financial literacy. This paper attempts to form the best way to allocate financial resources in accordance with sharia. The form is hoped to be the guidance for the decision makers to take every action in financial matters. The form comprises CDIC which are charity, debt, investment, and consumption respectively. These priority components are believed to improve the welfare in society as well as the tool of poverty alleviation.