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FinancialLiteracyAmongYouthsinKlangValley-RevisedFinale.pptxImportance of Financial Literacy Among Youths in Klang Valley
By
Kumar Subramaniam
Introduction
Financial education in Malaysia has not been addressed well especially among youth between ages of 21 – 24 years ( Ibrahim et al. 2009)
The financial education programs carried out before did not address the specific issues since there are still high credit card debts and university students lack positive cash management practices by the time they start employment ( Ibrahim et al. 2009).
High school curriculum does not address how to effectively use income regarding savings in the bank account, how to manage credit cards, mortgages, mutual funds, social security, loans, insurance and taxes
The young people form a large percentage of the people living in Malaysia given that the median age of the population as of 2016 was 28 years (Dosm, 2016).
Cont’d
Youths who have acquired the financial skills will take advantage of the opportunities in Klang Valley while those who do not will miss out on the opportunities.
Money is an essential element in everyday life. Learning how to earn, manage and grow finances is thus crucial for achieving success, freedom and independence in life.
According to the MonsterTrak, 57% of the college students are planning to move back in with their parents due to financial difficulties
Another study by the National Foundation for Credit Counseling has indicated 39% of the adults living in America have zero non-retirement savings.
The shocking statistics indicate the lack of financial literacy among youths.
Problem Statement (Industry Gap)
According to the MonsterTrak, 57% of the college students are planning to move back in with their parents due to financial difficulties.
According to various studies, a high percentage of the high school students are not prepared to handle finances when they finally graduate.
The Student Monitor has indicated 62% of the graduates leave school with an average $27,236 in student debt due to lack of financial literacy.
In Malaysia, the World Bank survey found only 36% of its citizens are financially literate.
Problem Statement (Theoretical Gap)
Failure to address the specific skills needed daily by the students when they finally graduate creates a problem since they will start earning money without the skills on how to manage it well.
If the youths knew how to manage finances, thy would grow their savings, spend wisely and start acquiring assets at a young age.
It will be important for the youths to learn about budgeting, savings, spending, debt management, investment and spending behavior.
This study will examine the importance of financial literacy among youths in Klang valley.
Research Question
Objectives of the Study
To investigate the effect of financial literacy in making sound financial decisions?
To investigate the impact of financial literacy in setting financial goals?
To examine how financial literacy helps in making predictions about the future?
To investigate how financial literacy helps in measuring and reassessing financial progress?
Research Questions
How does financial literacy help in making sound financial decisions?
How does financial literacy help in setting financial goals?
How does financial literacy help in making predictions about the future?
How does financial literacy help in measuring and reassessing financial progress?
Significance of the Study (Theoretical Contribution)
The study findings will inform the policy makers on the need to train the youths on financial literacy. The policy makers will learn of the existing gaps in the education curriculum.
The findings of the study will inform the schools heads, bank managers and heads of other institutions dealing with the youths on the need to train them on financial skills
Academicians will have an in-depth understanding of the topic. Students in the field of finance, accounting and economics will use the study as a resourceful material in the course of their learning.
Significance of the Study(Practical Contribution)
Malaysia plans to be one of the leading economies in the world. There are different efforts put to achieve the goal.
The youths remain critical in the economic progress of Klang Valley in Malaysia. The study will thus inform the policy makers on the need to train the youths on financial literacy. The policy makers will learn of the existing gaps in the education curriculum.
The study will encourage other researchers to research more on financial literacy among the youths. Academicians will have an in-depth understanding of the topic. Students in the field of finance, accounting and economics will use the study as a resourceful material in the course of their learning.
The study will increase the engagement among policy makers, the government and researchers and raise awareness on financial literacy.
Variables
| Making sound financial decisions | Setting financial goals | Making predictions about the future | Measuring and assessing financial progress |
| According to a study by Financial Literacy Foundation (FLF, 2007), only 47% of people budget for their daily expenses | Australian Securities and Investments Commission (ASIC) shows youths between the age of 16-25 have a high risk of making financial mistakes | A survey indicates few people would retire on their own savings | National Longitudinal Survey of Youth shows less than 27% of the youths understand concepts such as inflation. |
| by Financial Literacy Foundation shows 17% of the people who are employed could survive in case they had a financial emergency. | 27% of the people find it hard to keep some money aside for purchasing assets | According to a report by Malaysia Department of Insolvency people who went bankrupt were between the age of 20 and 30. | Bank Negara Malaysia has already noted a gap in the financial capability of the clients |
Conceptual Framework
Making sound financial decisions
Setting financial goals
Financial Literacy
Making predictions about the future
Measuring and reassessing progress
H1
H3
H2
H4
Resource dependence theory
Resource dependence theory
Resource based theory
Resource dependence theory
Hypothesis
Financial literacy helps in making sound financial decisions
Financial literacy help in setting financial goals
Financial literacy help in making predictions about the future
Financial literacy help in measuring and assessing financial progress
Youths gain skills on how to make financial skills regarding loans, savings and budgeting
Youths set clear goals on retirement plans, buying assets and funding businesses
Youths can forecast the future trends regarding inflation and fluctuation of prices
Youths can assess their financial growth when they have the financial skills
Methodology
1. Research design
Quantitative research design
2. Population of the study
Targeting to interview 100 youths from Klang Valley
The 100 youths will comprise of 50 youths who are in school and 50 who are working.
3. Sample size
Should the results of the interview be homogenous, the sample size will be 48 (n=48) otherwise it will be expanded to 60 (n=60)
Cont.…
4. Sampling technique
Non-probability sampling technique will be used
5. Data collection
In-depth interviews using semi-structured questions will be used
It will take three weeks.
Measurement Table
| Variable | Questions | Target group | Justification | References |
| Making sound financial decisions | What financial decisions do you make? How effective are you in making the decisions? | Youths who are working | Youths who are earning make financial daily | Babiarz & Robb (2014) |
| Measuring and assessing financial progress | Have you seen any progress in your finances? Do you plan to improve your financial skills? | Youths who are working | Youths who are employed can assess their financial progress | Idris et al., (2017) |
Measurement Table
| Variable | Questions | Target group | Justification | References |
| Making predictions about the future | How do you plan to manage finances in future? | Youths who are in school | The youths in high school have predictions on how they will manage money once they get employed | Boisclair et al., (2017) |
| Setting financial goals | What are your financial goals? 2. How do you plan to achieve the goals? | Youths who are in school | The youths in school have goals on what they would like to achieve in future | Idris et al., (2017) |
