Are our children financially illiterate? The case in Kedah

Authors

  • Hasniza Mohd Taib College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia
  • Rusmawati Ismail College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia
  • Logasvathi Murugiah College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia
  • Shri Dewi Applanaidu College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia
  • Muhamad Noor Habibi B. Hj. Long College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia

DOI:

https://doi.org/10.31580/ojst.v5i1.2732

Keywords:

Financial Literacy, Bankruptcy, Saving and Spending Behavior, Financial Socialization Agents

Abstract

The main objective of this paper is to identify the level of children financial literacy in Kedah and analyze the significant factors that influenced their level of financial literacy. This study surveyed 320 primary school students in Kedah, aged from 7 to 12 years old using mixed method. Results shows that children in Kedah is financially literate. Besides that, there are significant different in children financial literacy according to their parent education level, parental income, student class group and school location. Based on regression results, showed that saving behavior, spending behavior, peer role, school involvement, parent role, and technology are significantly influence children financial literacy.

Author Biographies

  • Hasniza Mohd Taib, College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia

    Universiti Utara Malaysia, 06010, Kedah, Malaysia

  • Rusmawati Ismail, College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia

    Universiti Utara Malaysia, 06010, Kedah, Malaysia

  • Logasvathi Murugiah, College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia

    Universiti Utara Malaysia, 06010, Kedah, Malaysia

  • Shri Dewi Applanaidu, College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia

    Universiti Utara Malaysia, 06010, Kedah, Malaysia

  • Muhamad Noor Habibi B. Hj. Long , College of Business, Universiti Utara Malaysia, 06010, Kedah, Malaysia

    Universiti Utara Malaysia, 06010, Kedah, Malaysia

References

Alekam, J. E., Md.Salleh, M., & Mohd. Mokhtar, S. (2018). The Effect of Family, Peer, Behavior, Saving and Spending Behavior on Financial Literacy among Young Generations, AIMI Journal, 7(3), 309-323.

Ali, S. (2013). Financial Literacy in Malaysia: Issues and Status Update. Bank Negara Malaysia, Bank Negara Malaysia (Central Bank of Malaysia), International Seminar on Financial Education and Retirement Savings, Kuala Lumpur, 17&18 September 2013.

Asarta, C. J., Hill, A. T., & Meszaros, B. T. (2014). The features and effectiveness of the Keys to Financial Success curriculum. International Review of Economics Education, 16(1), 39-50.

Bank Negara Malaysia (2019). Malaysia National Strategy for Financial Literacy 2019-2023. Kuala Lumpur, Malaysia. Retrieved from https://www.sc.com.my/api/documentms/download.ashx?id=6385977c-bd2c-4612-bda8-9ce6a5961720.

Barbour, M. K., & Reeves, T. C. (2009). The reality of virtual schools: A review of the literature. Journal of Computers and Education, 52(2), 402-416.

Barratt, H., & Shantikumar, S. (2009; 2018). Methods of sampling from a population. Retrieved from Health Knowledge: https://www.healthknowledge.org.uk/public-health-textbook/research-methods/1a-epidemiology/methods-of-sampling-population.

Bernheim, B. D., Garrett, D. M., & Maki, D. M. (1997). Education and Saving: The Long-Term Effects of High School Financial Curriculum Mandates. NBER Working Paper Series, 1-30.

Bujang, M. A., Omar, E. D., & Baharum, N. A. (2018). A Review on Sample Size Determination for Cronbach’s Alpha Test: A Simple Guide for Researchers. Malays J Med Sci, 25(6), 85-99.

Calamanto, M. P. (2010). Learning Financial Literacy in the Family. SJSU Scholar Works.

Carvalho, M. (2019, March 4). Guan Eng: Low financial literacy among Malaysian youth contributing to high bankruptcy rates. Retrieved from The Star: https://www.thestar.com.my/news/nation/2019/03/04/guan-eng-low-financial-literacy-among-malaysian-youth-contributing-to-high-bankruptcy-rates/.

Chan, K., & McNeal, J. U. (2006). Rural Chinese Children as Consumers: Consumption Experience and Information Sources. Journal of Consumer Behavior: An international Review, 5, 182-192.

Chen, H., Volpe, R. P., & Pavlicko, J. J. (1996). Personal investment literacy among college students: A survey. Financial Practice and Education, 6(2), 86-94.

Chen, H., & Volpe, R. P. (1998). An Analysis of Personal Financial Literacy among College Student. Financial Services Review, 7(2), 107-128, DOI: 10.1016/S1057-0810(99)80006-7.

Chinen, K., Endo, H. (2012). Effects of Attitude and Background on Students’ Personal Financial Ability: A United States Survey. International Journal of Management, 29(2) Part. 2, 778-791.

Danes, S. M., & Haberman, H. R. (2007). Teen Financial Knowledge, Self-Efficacy, and Behavior: A Gendered View. Journal of Financial Planning and Planning, 18(2), 48-60.

Danes, S. M., Rodriguez, M. C., & Brewton, K. E. (2013). Learning Context When Studying Financial Planning in High Schools: Nesting of Student, Teacher, and Classroom Characteristics. Journal of Financial Counseling and Planning, 24(2), 20-36.

Davidson, I. B. (2006). Financial Literacy Important for Future. Montana Business Quaterly/Autumn. Pp 22.

Department of Insolvency Malaysia. (2018). Bankruptcy Statistics December 2018. Retrieved from http://www.mdi.gov.my/images/documents/Statistics/Bankrupcy/StatistikKebankrapandisember2018.pdf.

Dubow, E., Boxer, P., Huesmann, L. R. (2009). Long-term Effects of Parents’ Education on Children’s Educational Success: Mediation by Family Interactions, Child Aggression and Teenage Aspirations. Merril-Palmer Quarterly, 55(3), 224-249.

Emmanuel, K. O. (2010). Financial Literacy and Youth Entrepreneurship in South Africa. African Journal of Economic and Management Studies, 1(2), 164-182.

Ermisch, J., Francesconi, M., (2001). The Effect of Parent’s Employment on Outcomes for Children. Joseph Rowntree Foundation, 228-231.

Fabris, N., & Luburic, R. (2016). Financial Education of Children and Youth. Journal of Central Banking Theory and Practice, 5(2), 65-79. DOI: 10.1515/jcbtp-2016-0011.

Ghazali, M. S., Azer, I., Mohamad, S. A., Arifin, N. M., & Mat, A. (2017). Personal Financial Literacy among High School Students in Raub, Pahang, Malaysia. Journal of Engineering and Applied Sciences, 12(7), 2280-2284. DOI: 10.3923/jeasci.2017.1830.1834.

George, D., & Mallery, P. (2010). SPSS for Windows Step by Step: A Simple Guide and Reference 17.0 Update. 10th Edition. Boston: Pearson.

Grody, A. D., Grody, D., Kromann, E., Sutliff, J. (2008). A Financial Literacy and Financial Services Program for Elementary School Grades - Results of a Pilot Study. SSRN Electronic Journal, 1-32. DOI: 10.2139/ssrn.1132388.

Grusec, J. E., & Davidov, M. (2007). Socialization in the family: The roles of parents. In J. E. Grusec & P. D. Hastings (Eds.), Handbook of socialization: Theory and research (pp. 284–308). New York and London: Guilford Press.

Gudmunson, C. G., & Danes, S. M. (2011). Family Financial Socialization: Theory and Critical Review. Journal of Family and Economic Issues, 32(4), 644-667.

Hair, J., Anderson, R., Tatham, R., & Black, W. (2006). Multivariate Data Analysis. Upper Saddle River, New Jersey.

Hair, Jr., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis (7th ed.). Upper Saddle River, NJ: Prentice Hall.

Harari, T. T. (2016). "Financial literacy among children: the role of involvement in saving money", Young Consumers, 17(2), 197-208, https://doi.org/10.1108/YC-01-2016-00579.

Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household Financial Management: The Connection between Knowledge and Behavior. Federal Reserve Bulletin, 310-322.

Holden, K., Kalish, C., Scheinholtz, L., Dietrich, D., & Novak, B. (2009). Financial Literacy Programs Targeted on Pre-School Children: Development and Evaluation. La Follette School Working Paper, 1-25.

Huhmann, B. A., & McQuitty, S. (2009). A model of consumer financial numeracy. International Journal of Bank Marketing, 27(4), 270-293. DOI: 10.1108/02652320910968359.

Ibrahim, D., Harun, R., Isa, Z. M. (2009). A Study on Financial Literacy of Malaysian Degree Students. Cross-cultural Communication. Canadian Academy of Oriental and Occidental Cultre. 5(4), 51-59.

Incharge Debt Solutions (2019). Financial Literacy for Kids. Retrieved from Incharge Debt Solutions: https://www.incharge.org/financial-literacy/resources-for-teachers/financial-literacy-for-kids/.

Ironico, S. (2012). The active role of children as consumers. Young Consumer, 13(1), 30-44.

Ismail, S., Serguieva, A., & Singh, S. (2011). Integrative model of students’ attitude to educational loan repayment: A structural modelling approach. Journal of International Education in Business, 4(2), 125-140.

Isomidinova, G., & Singh, K. J. (2017). Determinants of Financial Literacy: A Quantitative Study among Young Students in Tashkent, Uzbekistan. Electronic Journal of Business and Management, 2(1), 61-75.

Jamal, A. A., Ramlan, W., Karim, M. A., Mohidin, R., & Osman, Z. (2015). The Effects of Social Influence and Financial Literacy on Savings Behavior: A Study on Students of Higher Learning Institutions in Kota Kinabalu, Sabah. International Journal of Business and Social Science, 6(11), 110-119.

Jorgensen, B. L., Savla, J. (2010). Financial Literacy of Young Adults: The Importance of Parental Socialization. Journal of Applied Family Studies, 465-478. DOI: 10.1111/j.1741-3729.2010.00616.x.

Lusardi, A., & Mitchell, O. S. (2008). Planning and Financial Literacy. How do Women Fare? American Economic Review, 413-417.

Lusardi, A., Mitchell, O. S., & Curto, V. (2009). Financial Literacy among the Young: Evidence and Implications for Consumer Policy. Journal of Consumer Affairs, 44(2), 358-380.

Lusardi, A., & Mitchell, O. S. (2013). The Economic Importance of Financial Literacy: Theory and Evidence. Journal of Economic Literature, 52(1), 5-44.

Lyons, A. C., Palmer, L., Jayaratne, K. S., & Scherpf, E. (2006). Are We Making the Grade? A National Overview of Financial Education and Program Evaluation. The Journal of Consumer Affairs, 40(2) 208-235.

Mokhtar, N. A. (2015). Pengurusan Kewangan Dalam Kalangan Kanak-Kanak Sekolah Rendah Malaysia. Universiti Putra Malaysia.

Murugiah, L. (2016). The Level of Understanding and Strategies to Enhance Financial Literacy among Malaysia. International Journal of Economics and Financial Issues, 6(s3), 130-139.

Norvilitis, J. M., MacLean, M. G. (2009). The role of parents in college students’ financial behaviors and attitudes. Journal of Economic Psychology, 31(1), 55-63.

Nunnally, J. (1978). Psychometric Theory. New York: Mac-Graw Hill.

OECD. (2005). OECD Principles and Good Practices for Financial Education and Awareness - Financial Stability Board. Recomendation of the Council, July, 7. http://www.financialstabilityboard.org/2005/06/cos_050622/.

OECD. (2015). Core Competencies Framework on Financial Literacy for Youth. OECD/INFE. Retrieved from https://www.oecd.org/finance/Core-Competencies-Framework-Youth.pdf.

OECD. (2018). The Application of Behavioural Insights to Financial Literacy and Investor Education Programmes and Initiatives. Retrieved from http://www.oecd.org/finance/The-Application-of-Behavioural-Insights-to-Financial-Literacy-and-Investor-Education-Programmes-and-Initiatives.pdf.

Pallant, J. (2000). Development and validation of scale to measure perceived control of internal states. Journal of Personality Assessment, 75, 308-337.

Sabri, M. F., MacDonald, M. (2010). Savings Behavior and Financial Problems among College Students: The Role of Financial Literacy in Malaysia. Cross-cultural Communication, 6(3), 103-110.

Shim, S., Barber, B. L., Card, N. A., Xiao, J., & Serido, J. (2009). Financial Socialization of First-year College Students: The Roles of Parents, Work, and Education. Journal of Youth Adolescence, 35, 1457-1470.

Sohn, S.-H., Joo, S.-H., Grable, J. E., Lee, S., & Kim, M. (2012). Adolescents’ financial literacy: The role of financial socialization agents, financial experiences, and money attitudes in shaping financial literacy among South Korean youth. Journal Adolescence, 1-12. DOI:10.1016/j.adolescence.2012.02.002.

Sorooshian, S., & Teck, T. S. (2014). Spending Behaviour of a Case of Asian University Students. Journal of Asian Social Sciences, 10(2), 64-69. DOI:10.5539/ass.v10n2p64.

S&P Global Financial Literacy. (2014). Financial Literacy around the World: Insight from the Standard & Poor Rating Services Global Financial Literacy Survey. World Bank.

Statistics Solutions. (2013). Normality. Retrieved from https://www.statisticssolutions.com/normality/.

Ward, S. (1974). Consumer Socialization: Initial Study Results. Advances in Consumer Research, Vol. 1, 120-125.

Wolla, S. (2017). Evaluating the effectiveness of an online module for increasing financial literacy. Social Studies Research and Practices, 12(2), 154-167.

Wong, K. (2017, October 4). BNM: Malaysians find it hard to raise cash for emergencies. Retrieved from The Malaysian Reserve: https://themalaysianreserve.com/2017/10/04/bnm-malaysians-find-hard-raise-cash-emergencies/.

Zaimah, R., Sarmila, M., Lyndon, N., Azima, A., Selvadurai, S., Saad, S. (2013). Financial Behavior of Female Teachers in Malaysia. Asian Social Science, 9(8), 34-41.

Downloads

Published

2023-03-28

Issue

Vol. 5 No. 1 (2022): March

Section

License

Copyright (c) 2023 Open Journal of Science and Technology

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.