Components Of Financial Literacy Research Articles

THE LEVEL OF FINANCIAL LITERACY OF ACADEMIC YOUTH FROM RURAL AREAS IN THE MALOPOLSKIE VOIVODSHIP

The main purpose of the work is to define and characterize the level of financial literacy of students coming from rural areas in the Malopolskie voivodship in 2018. The main source of data used was primary information from the author’s own study (the PAPI method, a group of 170 respondents). The research used a set of questions to assess the level of financial literacy of adults proposed by the OECD INFE. In addition to primary sources, Polish and foreign literature on the subject was also used to achieve the goal. Total statistical indicators (mean, minimum, maximum) were used for data analysis and the non-parametric chi-square test (χ2). As results from the analysis, students are characterised by an average level of financial literacy, which may indicate a low effectiveness of financial education activities carried out at various levels of education in Poland. The factors determining the level of financial literacy of rural youth were gender and the field of study. Men and people studying economics were characterized by a higher level of financial literacy. Financial behaviour is a component of financial literacy in which students received the lowest results. The minimum target score in this module was obtained by only 24% of people.

ФОРМИРОВАНИЕ МАТЕМАТИЧЕСКОЙ СОСТАВЛЯЮЩЕЙ ФИНАНСОВОЙ ГРАМОТНОСТИ УЧАЩИХСЯ ОБЩЕОБРАЗОВАТЕЛЬНОЙ ШКОЛЫ: СОВРЕМЕННОЕ СОСТОЯНИЕ, ПРОБЛЕМЫ И РЕШЕНИЯ

ФОРМИРОВАНИЕ МАТЕМАТИЧЕСКОЙ СОСТАВЛЯЮЩЕЙ ФИНАНСОВОЙ ГРАМОТНОСТИ УЧАЩИХСЯ ОБЩЕОБРАЗОВАТЕЛЬНОЙ ШКОЛЫ: СОВРЕМЕННОЕ СОСТОЯНИЕ, ПРОБЛЕМЫ И РЕШЕНИЯ

An investigation of the demographic factors affecting financial literacy and its components among urban Indians

The purpose of this paper is to investigate the impact of socio-demographic factors on financial literacy and its components, namely, financial behaviour, financial attitude and financial numeracy skills. Also, the relationships between the components of financial literacy and the influence of financial numeracy skill on investment pattern are examined. The data showed that financial literacy in terms of familiarity with financial instruments and participation in formal financial system is quite reasonable at 65% among the participants. Socio-demographic variables like gender, age, education, income, and reliability of income are found to have significant influence on financial literacy. Further, all the components of financial literacy are found to impact each other positively. The findings also suggest that financial numeracy skill may improve overall financial literacy and secondary market participation in India. However, the use of financial websites or social media sites for investment decisions is meagre.

An investigation of the demographic factors affecting financial literacy and its components among urban Indians

The purpose of this paper is to investigate the impact of socio-demographic factors on financial literacy and its components, namely, financial behaviour, financial attitude and financial numeracy skills. Also, the relationships between the components of financial literacy and the influence of financial numeracy skill on investment pattern are examined. The data showed that financial literacy in terms of familiarity with financial instruments and participation in formal financial system is quite reasonable at 65% among the participants. Socio-demographic variables like gender, age, education, income, and reliability of income are found to have significant influence on financial literacy. Further, all the components of financial literacy are found to impact each other positively. The findings also suggest that financial numeracy skill may improve overall financial literacy and secondary market participation in India. However, the use of financial websites or social media sites for investment decisions is meagre.

An investigation of the demographic factors affecting financial literacy and its components among urban Indians

The purpose of this paper is to investigate the impact of socio-demographic factors on financial literacy and its components, namely, financial behaviour, financial attitude and financial numeracy skills. Also, the relationships between the components of financial literacy and the influence of financial numeracy skill on investment pattern are examined. The data showed that financial literacy in terms of familiarity with financial instruments and participation in formal financial system is quite reasonable at 65% among the participants. Socio-demographic variables like gender, age, education, income, and reliability of income are found to have significant influence on financial literacy. Further, all the components of financial literacy are found to impact each other positively. The findings also suggest that financial numeracy skill may improve overall financial literacy and secondary market participation in India. However, the use of financial websites or social media sites for investment decisions is meagre.

Level of financial literacy of academic youth from rural areas in the Visegrad Group countries

The aim of the study is to determine the level of financial literacy of academic youth from rural areas in the V4 Group countries, as well as to compare the results obtained with the level of financial literacy of young people from cities. The source of data used for analysis and inference were primary information obtained from own research (PAPI method, 900 people). The research used a set of questions to assess the level of financial literacy of adults proposed by the OECD INFE. In addition to primary sources, secondary sources were also used to achieve the goal. The measures of descriptive statistics and one-way analysis of variance (F) were used. The level of financial literacy was determined at the medium level, which may indicate the low effectiveness of financial education measures implemented at different levels of education. The component of financial literacy where students from rural areas had the lowest scores was basic financial knowledge. Only 43% of people from rural areas achieved the minimum target score.

SME Managers’ Financial Literacy on Firm Practices in Tanzania

The study examined the impact of SME managers' financial literacy on firm key practices of financial planning and control, bookkeeping and use of financial services. The study uses a structural equation modelling-partial least square (SEM-PLS) model to examine the variables relationships using SmartPLS 3 software. The results reveal the significant contribution of financial knowledge on financial attitude and behaviour. Also, financial attitude demonstrates to have a significant impact on the firm financial planning and control, bookkeeping functions and firm use of financial services. Financial behaviour as a component of financial literacy has a significant association with bookkeeping function and use of financial service. This study also provides insight into the individual categories of financial literacy (financial knowledge, financial attitude, financial behaviour) influence on firm internal and market practices. Enhancing SMEs managers' financial literacy would have a multifaceted impact on firm financial management, practices ultimately improve its performance.

Формування фінансової грамотності майбутніх інженерів на заняттях з вищої математики

The article analyzes the conceptual ideas of financial literacy formation of future engineers in higher mathematics classes. The article substantiates that the formation of financial literacy of future engineers in mathematics classes is a complex process, the effectiveness of which largely depends on the level of their mathematical abilities and mastery of teaching material. Based on the current research on financial literacy, the author proposes to consider the financial literacy of future engineers as an integrated quality, which manifests itself in the unity of two main aspects: personal (motivational, value components) and activity (cognitive and operational components), which allows for the formation and formulation. financial knowledge of the basics of economics, learning to make the right financial decisions. The basic components of financial literacy of future engineers are described: motivational (system of motives, self-education skills, self-improvement in financial education, critical thinking of independent work, self-organization and self-control); value (value settings for the need for knowledge of financial theory); cognitive (financial knowledge and constant updating); operating (use of financial knowledge gained in practice). A structural diagram of financial literacy of future engineers has been developed. It has been found that it is advisable to use a task approach to formulate the financial literacy components of future engineers, since the tasks interpret a peculiar model of practical situations in which students are immersed in the process of finding their solutions. It is determined that in the educational process of studying higher mathematics tasks perform the following functions: educational (as a means of assimilation of knowledge, skills and skills); stimulating (stimulus to exercise cognitive activity); supervising (as a means of controlling the quality of learning the learning material); developing (as a means of developing the intellectual sphere of the individual). Cross-curricular links in higher mathematics topics with finance have been traced. Examples of using financial content problems in higher mathematics classes in the process of studying linear and vector algebra and analytical geometry, differential calculus are given.

Components of Financial Literacy of Young People

Abstract The financial crisis has drawn attention to the importance of the population’s financial literacy. I am investigating assessment methodologies to evaluate financial literacy both from the point of view of macroeconomics and microeconomics in my study. I am of the opinion that the elaboration of the financial competency model based on international database is the solution that can lead to the determination of conditions of financial awareness by collectively investigating financial education, core competencies, and the psychological role of money. I surveyed the financial knowledgeability of Hungarian high school students with the help of field research after assessing the OECD and PISA findings. I received very different results of knowledge, behaviour, and attitudes by school type, gender, age-group, and family background, which might support the assessment of financial literacy indicators, the evaluation of results, and international comparisons.

Financial literacy and the role of numeracy–How individuals’ attitude and affinity with numbers influence financial literacy

Being financially literate is an important life skill that is equally important for one's own sake as well as for society. Findings indicate that individuals are financially illiterate while interventions to increase the level of financial literacy are ineffective. The effect of financial literacy on financial behavior reported in correlation studies may be driven by some unknown third variable, such as individual cognitive ability. The current study investigated the role of cognitive and emotional factors in attaining financial literacy. In a representative sample of the general population, our regression models indicate that a central component of financial literacy can be traced to numeracy and the emotional attitude towards numbers (i.e. mathematics anxiety). Thus, a driving force behind becoming financially literate resides in the ability to understand numbers and having an emotional attitude towards numbers that does not interfere with an individual's daily engagement in activities involving mathematics and financial decisions.

Financial literacy among youth

PurposeThe 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/approachThis 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.FindingsThe 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/valueYouth 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.

Debt Attitudes in Gender Perspective: Is There an Effect of Debt Knowledge and Skills?

The link between financial attitudes and financial market behaviour is well-documented. Yet, little is known about the role of financial knowledge and skills – i.e. main components of financial literacy – for shaping financial attitudes, especially from a gender perspective. Our study focuses on debt literacy and debt attitudes. We conducted a computer-assisted telephone interview on a representative sample of adult Poles (N=1,004), subsequently adopting latent class analysis to reveal their debt attitudes. Links between debt literacy and debt attitudes were studied with multinomial regression models. The results show that debt attitudes are diversified in Polish population and can be grouped into five classes having different attitude profiles. In some classes, the structure of debt attitudes is far from simple, unidimensional pro-debt / anti-debt construct. Although we did not find significant gender differences either in conceptualization of debt attitudes or in their drivers, we showed that in all but one class the attitudes are strongly linked either to debt knowledge or debt skills, or both. Debt skills were revealed as a particularly strong predictor of debt attitudes.

Financial literacy in emerging economies

PurposeThe purpose of this paper is to examine the impact of individual components of financial literacy in promoting financial inclusion of poor households in rural Uganda.Design/methodology/approachThe study was cross-sectional combined with correlation and regression analyses. Data were collected from 400 poor households drawn from four regions in rural Uganda. Hierarchical regression analysis was used to test for the contribution of individual components of financial literacy on financial inclusion of poor households in rural Uganda. In addition, confirmatory factor analysis was used to establish existence of convergent validity between the items used to measure the different constructs under study. Furthermore, analysis of variance was also adopted to test for variation in perceptions of poor households on being financially included.FindingsThe results generated from the study revealed that only attitude as a component of financial literacy significantly and positively predicts financial inclusion of poor households in rural Uganda. Contrary to previous thinking and empirical studies, behavior, knowledge, and skills are not significant predictors of financial inclusion of poor households in rural Uganda. Overall, the combined effect of the different components of financial literacy explains about 11.2 percent of the variance in financial inclusion of poor households in rural Uganda.Research limitations/implicationsThe study was not without limitations. The study adopted only cross-sectional study design, thus, leaving out longitudinal study. Therefore, future studies employing longitudinal research design worth undertaking. Furthermore, the sample although large enough focused only on poor households located in rural Uganda, therefore, ignoring peri-urban and urban areas in Uganda. Besides, the study used only quantitative data, thus, qualitative study using key informant interviews may be considered for further research.Practical implicationsThe paper indicates that policy makers, advocates of financial inclusion and researchers, should reconsider investigating individual contribution of the different components of financial literacy in promoting financial inclusion of poor households in rural Uganda. For researchers, it is important to re-analyze the individual components of financial literacy of behavior, knowledge, skills, and attitude in influencing financial inclusion of poor households in rural Uganda.Originality/valueThis paper combines both functional components (behavior and attitude) and non-functional measures (knowledge and skills) of financial literacy to explain financial inclusion of poor households in rural Uganda. Most financial literacy studies have mainly adopted only non-functional measures of knowledge and skills. Besides, these studies ignore the individual contribution of functional components and non-functional measures of financial literacy in explaining financial inclusion of poor households. Thus, this study is the first to examine the impact of individual components of financial literacy in explaining financial inclusion of poor households in rural Uganda.

Relationship between Financial Satisfaction and Financial Literacy: Exploring Gender Differences

The goals of this study were to explore gender differences in the components of financial literacy (financial knowledge, financial attitude and financial behavior) and financial satisfaction, and to explore gender differences in the relationship between financial satisfaction and the financial literacy components. Analyses conducted on a data collected on a large and heterogeneous sample of Croatian citizens (N = 900) showed that men scored higher on some financial literacy variables and were more financially satisfied. Moreover, in the male subsample there were significantly stronger correlations between financial satisfaction and some financial literacy variables (rational financial attitude, self-assessment of financial management and monitoring expenses) when compared to the female subsample. In addition to demographic variables, significant predictors of financial satisfaction in both gender groups were primarily financial behaviors. Financial attitude component explained additional financial satisfaction variance for men but not for women. Financial knowledge as the third component was not a significant predictor of financial satisfaction for either gender.

Personality, Attitude and Behavioural Components of Financial Literacy: A Comparative Analysis

Since the financial crisis in 2008 the investigation of financial literacy–especially its components (personality, attitudes, behaviour etc.) - is in the limelight. Modern economics have recognized that in order to effectively forecast financial and economic processes it is primordial to understand the attitudes of the members of society toward finances, as well as the characteristics of various social group sharing the same views and behaviours. In 2015 two relevant pieces of research were conducted in this topic in Hungary. One focuses on the financial personality types, while the other investigates Hungarians’ financial culture in general based on the research methodology of the OECD. Based on these two databases our comparative study highlights the main characteristics of financial personality types. The three clusters based on the OECD research cover the nine personality types from the results of the other Hungarian research. Our findings show that the cluster of “anxious unsatisfied” encapsulates the “economizers with little money”, the “price sensitive” and the “collector” personality types. Furthermore, the “satisfied conscious” covers the “order creates value”, the “diligent” and the “planner” personality types. Finally, the “moderately anxious unconsidered” involves the “ups and downs”, the “money-devouring” and the “cannot control finances” personality types. The clusters identified during the research show idiosyncratic financial and psychological vulnerability and/or protection.

Personality, Attitude and Behavioural Components of Financial Literacy: A Comparative Analysis

Since the financial crisis in 2008 the investigation of financial literacy–especially its components (personality, attitudes, behaviour etc.) - is in the limelight. Modern economics have recognized that in order to effectively forecast financial and economic processes it is primordial to understand the attitudes of the members of society toward finances, as well as the characteristics of various social group sharing the same views and behaviours. In 2015 two relevant pieces of research were conducted in this topic in Hungary. One focuses on the financial personality types, while the other investigates Hungarians’ financial culture in general based on the research methodology of the OECD. Based on these two databases our comparative study highlights the main characteristics of financial personality types. The three clusters based on the OECD research cover the nine personality types from the results of the other Hungarian research. Our findings show that the cluster of “anxious unsatisfied” encapsulates the “economizers with little money”, the “price sensitive” and the “collector” personality types. Furthermore, the “satisfied conscious” covers the “order creates value”, the “diligent” and the “planner” personality types. Finally, the “moderately anxious unconsidered” involves the “ups and downs”, the “money-devouring” and the “cannot control finances” personality types. The clusters identified during the research show idiosyncratic financial and psychological vulnerability and/or protection.

Taxation Awareness and its Impact on Financial Literacy

For Russia to become a socially oriented country its population should be kept well informed about the current tax legislation. The article discusses the concept of tax awareness and its relation to the concept of tax culture. The author describes the measures necessary to raise tax awareness in the Russian society, which involves increasing the population’s knowledge about tax legislation and identifying the factors preventing people from paying their taxes on time and in full. Raising tax awareness is also linked to enhancement of financial literacy among various age and gender groups with different tax status. Conceptually, this research is based on the attribution theory, planned behaviour theory and the social learning theory. The author sought to prove the hypothesis that the state is not interested in increasing the population’s tax literacy, which is one of the main components of financial literacy, because the government is incapable of answering the questions: how can citizens exercise their right to free education, free health care and social benefits, and who is actually entitled to these services and benefits? Methodologically, the research included a survey of heterogeneous social groups with different age, gender, social and tax status: young people, students, employed population, retirees, tax residents and foreign nationals. The article outlines measures that can keep people informed about tax legislation. Respondents were asked to rank these measures on a scale of one to five according to their importance. The article also describes the factors preventing law abiding citizens from paying taxes to budgets of different levels. These are the factors that tax authorities and the Ministry of Finance should be dealing with in the first place. Highlights The taxpayers should not be forced or bullied into performing their duties but instead they should be treated by the state as equal partners Tax authorities should conduct a well-organized campaign promoting responsible taxpaying and explaining why it is important It is shown that tax awareness of the population depends on people’s tax mentality and tax morality, which constitute tax culture For citation Koretskaya-Garmash V. A. Taxation Awareness and its Impact on Financial Literacy. Journal of Tax Reform, 2017, vol. 3, no. 2, pp. 131–142. DOI: 10.15826/jtr.2017.3.2.036 Article info Received May 7, 2017; accepted June 20, 2017

Financial literacy and over-indebtedness in low-income households

Financial literacy can explain a significant proportion of wealth inequality. Among the key components of financial literacy are numeracy and money management skills. Our study examines the relative importance of these components in the determination of consumer debt and household net worth among credit union members in socially disadvantaged areas. The main finding from our analysis is that money management skills are important determinants of financial outcomes but that numeracy has almost no role to play. This result adds to a recent US-based behavioural finance literature on the role of attention and planning in consumer finance. Findings are found to be robust when the sample is reduced to only those who have a clear role in household financial decision-making and also when controlling for potential endogeneity. Our findings have policy implications in the UK and elsewhere as credit unions across the world are important players in national financial literacy strategies.

Financial literacy education in the United States: Exploring popular personal finance literature

As libraries work to define their roles within the global financial literacy education movement, it will serve them well to understand the popular literary component to this movement: the personal finance self-help genre. In this literature study, the author read 12 of the most popular books of this genre, as determined by simulations of likely Google searches, and conveys herein some of the beliefs and strategies these books may have imparted to library patrons. This study will benefit librarians by enhancing their understanding of the personal finance genre, conveying the genre’s interrelation to the current financial literacy movement, and even prompting librarians to question their own understanding regarding certain financial literacy components.

The Interrelationship between Financial Attitude, Financial Behavior and Financial Knowledge

Financial literacy is shown to be an important life skill for people. It influences people every day financial decisions and has a macro impact on the economy and financial satisfaction of the society. Studies revealed financial literacy to cover three dimensions: financial knowledge, financial attitude and financial behavior. This research aims to examine the interrelationship between the three components of financial literacy. The main objectives of the current research are: a) firstly, to provide some evidences of the existing literature on the linkage between financial knowledge, financial attitude and financial behavior; b) secondly, to inspect this association in the case of Albanian university students; c) thirdly, to investigate the mediating effect of financial attitude on the connection between financial knowledge and financial behavior; d) finally, to present some conclusions and recommendation for parents, school and future researchers. The main research questions addressed in this study are: 1) Is there any relationship between students’ financial knowledge and their financial attitude and behavior in the case of Albania? 2) Does financial attitude serve as a mediator factor between financial knowledge and financial behavior? The database for this investigation is provided by a survey conducted on 637 students from eight universities in Albania and is part of my dissertation study. Person correlation technique and linear regression model will be employed to analyse the database. Results of this study demonstrate a statistically significant relationship between the three components of financial literacy. In addition, financial attitude is discovered to play a mediating effect on the association between financial knowledge and financial behavior. Future research can be undertaken to explore whether financial knowledge serves as a mediator in the linkage between financial attitude and financial behavior.