Impact of Economic and Financial Literacy on the Spending Behaviour of Selected Public Servants in Lagos State Nigeria
Author(s): Alexander Ehimare Omakhanlen, Paulinus Ikechukwu Iyika, Peace Onyedikachi Chimezie, Olusegun Osho
Abstract: Low level of financial literacy among the young workforce has remained a lingering problem, especially in developing countries. This has been pointed out as one of the causes of poor personal financial management practice. This problem has hampered the efforts of various governments and institutions in this region geared towards financial inclusion and the overall economic wellbeing of the citizens. Most studies in this area focused on the financial literacy level of people rather than the effect on their behaviour. This study is an attempt examine the effect of financial literacy level on spending behaviour of 30 young adults from public sector organizations. The study employed the standard questions for assessing the knowledge level of respondents. The questions test their understanding of simple and compound interest,inflation and portfolio diversification. For the spending behaviour, thePlanned Behaviour Theory (PBT) proposed by Icek Ajzen (1985) as a theoretical framework for measuring spending behaviour using the respondents preparation of budget and personal pre-retirement savings account as proxies. Data was collected using a structured questionnaire . Descriptive statistics and multiple regression was used to analyze thedata. The result showed that there is a positive correlation between the level of financial literacy and the spending behaviour of therespondents. The less the knowledge of financial management the people have, the higher the risk of poor spendingbehaviour. The conclusion was drawn to say that more work is needed to equip the youth especially on the art of financial management.
Keywords: Financial literacy, spending behaviour, financial inclusion, retirement savings, budget, financial management
DOI: 10.37394/23207.2021.18.11WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 18, 2021, Art. #11