Contribution of Financial Literacy to Behavior

Abstract

Almost all the people around the world behave with money in daily lives whereas understanding how they behave is important. It is obvious that the education, which can not affect behavior of people, is worthless. Financial literacy also is believed to change financial behavior of individuals. Financial literacy implies two sides, i.e. concept and application of personal finance. The concept consists financial knowledge and basic skill of numeracy and financial decisions; the application consists the financial behavior. The focus of the article is to discuss how the financial literacy contributes financial behavior and thereby financial wellbeing of individuals. For this, the article presents a transmission mechanism of financial knowledge and skill to the financial behavior through a framework. However, there are some contexts, conditions and criterions to transmit the financial knowledge and skill into financial behavior and well-being. Moreover, categorizing the financial behavior of individuals is a significant issue in study of financial literacy. Particularly for the survey research, a new categorization and degree of the financial behavior is presented, which is ranked as good, moderate and weak financial behavior in comparative ways. The study establishes the relevancy of the evaluation criteria of financial behavior and also presents a framework on how the financial educations work contribute in financial behavior.

Generation Z: Financial Literacy, Sharia Financial Literacy, Attitude, and Behavior

“…Hypotheses 1a and 1b suggest that financial literacy and financial literacy sharia students are influenced by financial attitude positively and significantly (β =0.535, t = 9,611, P < 0.05) and (β = 0.703, t = 9,316, P < 0.05). This result means, under Chaulagain (2015), financial attitudes are better in line with the understanding of financial literacy. These results align with Rai et al (2019) and Mabyakto ( 2017), contending that financial attitudes influence financial literacy.…”

Islamic Financial Literacy Amongst Muslim Students in Indonesia: A Multidimensional Approach

“…This dimension reflects technically the individual's mastery in using the ability to calculate in calculating interest, inflation, and risk diversification (Sekita, 2011) as well as planning to optimize financial transactions (Lusardi and Mitchell, 2014). Then, financial attitude is a dimension that shows judgment, the tendency to respond positively or negatively related to money and financial problems (Chaulagain, 2015). Then, financial behavior is a measurement of routine actions in financial management and planning such as activities to record daily finances or timely bill payments.…”

“…Then, financial behavior is a measurement of routine actions in financial management and planning such as activities to record daily finances or timely bill payments. Muslim students should only use financial services that meet the requirements (Chaulagain, 2015).…”

“…Improvements to the concept of literacy are needed because the concept is a more representative and relevant meaning in describing financial literacy in the community. Chaulagain (2015) reveals that students who approve of saving to save lives in the future do not execute what they know in their attitudes and behavior. The study proves that behavior and attitudes in finance are not always correlated or aligned with understanding or mastery of material from finance.…”

Contribution of Financial Literacy on Behaviour: A Nepali Perspective

“…8, No. 2, 2018 this connection, Chaulagain (2015) presents financial knowledge as a dimension of financial literacy that is contributed by financial education. Moreover, Oanea and Dornean (2012) categorize the definition of financial literacy as an awareness.…”