MALAVIYA NATIONAL INSTITUTE OF TECHNOLOGY JAIPUR

J.L.N. MARG, JAIPUR-302017, RAJASTHAN (INDIA)

COURSE: BUSINESS RESEARCH METHODS

TOPIC: RESEARCH PROPOSAL ON FINANCIAL LITERACY

AND FINANCIAL BEHAVIOUR OF TECHNICAL AND MANAGEMENT
STUDENTS OF MNIT

SUBMITTED TO: DR. RITIKA MAHAJAN

SUBMITTED BY: POOJA YADAV (2019PBM5534)
FINANCIAL LITERACY AND FINANCIAL BEHAVIOUR OF
TECHNICAL AND MANAGEMENT STUDENTS OF MNIT
Purpose: The purpose of this paper is to investigate the relationship between financial
literacy and financial behaviour of technical and management students of MNIT Jaipur and
to gauge whether technical students are financially literate since they have the background
on technical related courses.
Design/Methodology/approach: To reach the multiple objectives of the study quantitative
research methods will be utilized. Study will be based on primary data collected through
questionnaire survey. By referring to the literature related to financial literacy various
dimensions like investment, money management, credit, savings and insurance will be
selected to measure both level of financial literacy and nature of financial behaviour.
Questionnaire will be mainly sectioned into three parts. Section 1 will contain the
demographic information of all respondent while section 2 will contain Likert scale
questions to measure level of financial literacy under each dimension and section 3 will
measure financial behaviour under the same dimensions.
The sampling strategy will be cluster sampling.
Findings: The findings will be based on a standardized questionnaire that will be distributed
through various digital platforms among respondents to collect data. Answers of the
questionnaire will also be collected by personally visiting the respondents.
The analysis of the answers will tell us about the relationship between financial literacy and
of financial behaviour.
Research Limitations: The research will be limited to technical and management students of
MNIT Jaipur only.
Research Implications: The research will help in developing important conclusions about
the levels of financial literacy among technical and management students and also how
financial literacy affect their financial behaviour.
Various factors influencing students in financial management will also be identified with the
help of this study.
Originality/value: This is the study in the field of Finance, and helps to reveal to what extent
financial literacy affect financial behaviour and financial management decisions of
management students.
Keywords: Financial literacy, Financial behaviour, Financial management, Management
students, Technical undergraduates
RESEARCH PROBLEM:
Research problem is financial illiteracy among technical undergraduates.
With change in financial markets led to increase in individual responsibility—in particular for
savings and budget managing—being able to make appropriate financial decisions has
become of paramount importance.
It is important to investigate further as students with technical backgrounds in future gain a
well -deserved and respected position as Engineers in organisation. They have to take
certain level of financial decision in their respective departments for the well-functioning of
the organisation, there comes the weak point. Most of them are unable to take a substantial
financial decision.
And another aspect is whether management course aids any financial literacy to the
students pursuing such course.
This study will help organisations during selection process whether to accept or reject a
respective candidate for a defined position where one has to take crucial financial decisions
as this will prove the relationship of financial literacy with background education using
different analysis tools.
STUDY GOALS:
The present study is with the objective of

 To investigate the relationship between Financial Literacy and Financial Behaviour of

Management postgraduates of MNIT Jaipur.
 To investigate the relationship between Financial Literacy and Financial Behaviour of
Technical undergraduates of MNIT Jaipur.
 To investigate is there any positive correlation between financial related education
background and Financial literacy.
 To investigate whether a technical student should undergo courses like Management
to gain knowledge of financial related aspects.

LITERATURE REVIEW:
A. FINANCIAL LITERACY
Financial Literacy has been defined by many authors in vast number of the way. Financial
literacy is defined because the process which individuals use as a mixture of skills, resources,
and contextual knowledge to process information and make decisions with knowledge of
the financial consequences of that call. The definition by ANZ Bank (2011), (ANZ Bank
(2011), The ANZ Survey of Adult Financial Literacy in Australia, The Australia and New
Zealand Banking Group Limited (ANZ), Australia.) covers the broader area of macro-
economic tools which are used for the decision making by the individuals and accordingly,
“Financial literacy is the ability to make informed judgements and make money related
decisions. Financial literacy is therefore a combination of a person’s skills, knowledge,
attitudes and ultimately their behaviours in relation to money”. Thus, here importance is
given to the use and management of money with combinations of individual’s own personal
skills, knowledge, attitudes and behaviours. Financial literacy also can be defined as ‘the
ability to form informed judgments and to require effective decisions regarding the
utilization and management of money’. According to Remund (2010), (David , Remund
( 2010), Financial Literacy Explicated: The Case for a Clearer Definition in an Increasingly
Complex Economy, The Journal of Consumer Affairs, USA.)“The conceptual definitions of
financial literacy fall into five dimensions : (1) knowledge of financial concepts, (2) ability to
communicate about financial concepts, (3) aptitude in managing personal finances, (4) skill
in making appropriate financial decisions and (5) confidence in planning effectively for
future financial needs”. Thus, financial literacy is quite an easy measure of data, reflecting
also a group of individual behaviours and skills allowing them to take appropriate individual
financial decisions.
B. FINANCIAL BEHAVIOUR
Several studies in the past have tried to investigate the impact of financial literacy on
financial behaviour. Financial literacy has proved to facilitate student’s involvement in
savings and investment, freeing themselves from debt, effective money management
through living on a budget. Reference [1] add to this argument stating lack of financial
knowledge has often leans to face financial difficulties in students’ lives. Reference [2]
suggest that increasing financial literacy can directly lead to increase in living standards as
better decision making is corelated with money knowledge. Although a financial literacy
measure may be used to predict financial behaviours or outcomes, it does not necessarily
imply that individuals will behave in a way that many scholars, policymakers or educators
would deem optimal. In other words, the mere assumption that the presence of more
information and skills will lead to improved financial behaviour is faulty, as stated by
reference [3] Decision making or thought process of individuals is affected by several
factors- like knowledge, biases, personality, family members, societal factors , peer group
and friends. Reference [4] mainly states that financial well being is more of an inclined
decision of internal actions with other factors like economic and others in role. Therefore, it
is directly pointing out the critical importance to know the bridge between individual
financial problems and knowledge he possesses. However, it is generally recognized that the
level of financial knowledge is, in fact, an important determinant of individuals’ financial
behaviours, mostly the subjective knowledge, measured by the self-assessed individual
knowledge degree. The major factor contributing to big mistakes of individuals is lacked no
financial sophistication. There is evidence that financial literacy influences planning
behaviour, which, in turn, increases wealth holdings, even after controlling for many socio
demographic factors. It is also recognized that financial literacy has an attached kind of
connection with the background of studies, as management student can invest in stock
market and have a higher diversified portfolio. Debt related issues are highly affected by
financial literacy. Reference [5] found evidence that less literate consumers tend to transact
in high-cost manners, incurring higher fees and using high-cost borrowing.
RESEARCH GAP:
Education background gap in Financial literacy.
Many researches have been conducted in the past to relate gender gap in financial literacy
but rare of them focuses on education background related gap in Financial literacy and
Financial Behaviour of individuals.
However, it’s not easy to measure financial literacy, the questionnaire is developed keeping
in mind different definitions of Financial literacy and taken references from different
studies. The use of the same questionnaire survey across countries allows researchers to
identify similarities in financial literacy and financial behaviour with respect to education
background in distinct economic environments. It will help in identification of demographic
groups that display low levels of Financial knowledge.
Technical students show low level of financial literacy fundamentals.
RESEARCH METHOD:
By referring to the literature related to financial literacy various dimensions like investment,
money management, credit, savings and insurance will be selected to measure both level of
financial literacy and nature of financial behaviour.
This will help in setting up or identification of correlation between Financial literacy and
Financial behaviour with respective education backgrounds (Management and Technical).
Regression model concept will be used to test the hypothesis.
Three equation will be setup:
Z(FB)=βο+β1X(FLM)+β2X(FLI)+β3X (FLC)+ β4X(FLS)+β5X(FLINS) +et…………………. [1]
Where:
FB= Financial Behaviour
FLM = Financial Literacy on Money Management
FLI = Financial Literacy on Investment
FLS = Financial Literacy on Savings
FLC = Financial Literacy on Credit
FLINs = Financial Literacy on Insurance
Z(FB)=βο+β1X(FL)+ et………… [2]
FB= Financial Behaviour
FL = Level of Financial Literacy
Z(FB)=βο+β1X(EB)+ et………… [3]
EB= Education Background
HYPOTHESIS TO BE TESTED:
The alternative hypothesis is developed as-
H1- There is a relationship between Financial literacy and Education background of
management and technical students of MNIT
H2- There is a relationship between Financial Behaviour and Education background of
management and technical students of MNIT
H3- There is a relationship between financial literacy on money management and financial
behaviour of management and technical students of MNIT
H4 - There is a relationship between financial literacy on savings and financial behaviour of
management and technical students of MNIT
H5 -There is a relationship between financial literacy on investment and financial behaviour
of the management and technical students of MNIT
H6-There is a relationship between financial literacy on credit and financial behaviour on
borrowing & credit of the management and technical students of MNIT
H7 -There is a relationship between financial literacy on insurance and financial behaviour of
the management and technical students of MNIT
VARIABLES TO BE USED:
FL-FINANCIAL LITERACY (INDEPENDENT VARIABLE)
FB-FINANCIAL BEHAVIOUR (DEPENDENT VARIABLE)
EB-EDUCATION BACKGROUND
These three variables are used because their correlation will be studied in this research
study.
DATA:
Primary Data will be used in this study.
The sampling strategy will be Cluster sampling.
Population- The population of the study is all the postgraduate students in Management
Field and Technical undergraduates of MNIT Jaipur.
STUDY SITE- MNIT JAIPUR
The institute was established in 1963 as Malaviya Regional Engineering College (MREC), as a
joint venture of the government of India and Government of Rajasthan. It was named
after Madan Mohan Malaviya. V.G. Garde was its first principal. The institute originally
functioned from a temporary campus at Pilani and admitted 30 students each in Electrical
Engineering and Mechanical Engineering.[ The college moved to the present campus to
Jaipur in 1965.
MNIT offers a wide variety of courses of study in engineering, sciences, management, design
and humanities with a primary focus on engineering. Eight four-year undergraduate courses
of study leading to the Bachelor of Technology degree and a five-year undergraduate course
leading to the Bachelor of Architecture degree, with a total of over 3000 students.
Postgraduate degrees award Master of Technology (MTech), Master of
Science (MSc), Master of Business Administration (M.B.A) and Master of Urban Planning.
There are also doctoral programs with over 300 students. There are over 150 faculty
members engaged in teaching and research.
Pearson correlation and regression Analysis method of statistics will be used to measure the
relationship between financial literacy (independent variable) and financial behaviour
(dependent variable) and Education background of respondent.
Value of Pearson correlation will tell about positive or negative relationships between the
variables.
EXPECTED RESULTS:
There will be positive correlation between financial behaviour and all five dimensions of
financial literacy among students.
Also, there will be a positive correlation between financial literacy and Education
background of an individual.
MANAGERIAL IMPLICATIONS:
This study can be used by HR Managers during selection process for respective positions
with different Job description and specification by having an idea of the financial literacy
level of an individual by his education background history.
REFERENCES:
[1] J.R. Hibbert and I.F. Beutler, “The effects of financial behaviours on the quality of family
life: Evidence from adolescent perceptions.” In proceedings of the Association for Financial
Counselling and Planning Education, Symposium conducted at the 19th Annual Association
for Financial Counselling and Planning Education Conference, Orlando, FL 2001.
[2] J. P. Knapp, “The benefits of consumer education: A survey report” Michigan Consumer
Education Centre. 1991.
[3] S. Braunstein, and W. Carolyn, "Financial literacy: An overview of practice, research, and
policy." Fed. Res. Bull, vol. 88, pp. 445, 2002.
[4] C. A., Robb, and Woodyard A. "Financial knowledge and best practice behaviour."
Journal of Financial Counselling and Planning, vol.22, no. 1, pp. 60-70, 2011.
[5] A. Lusardi, and O. S. Mitchell. "Financial literacy and retirement planning: New evidence
from the Rand American Life Panel." CFS Working Paper, no.33, 2007.
ANNEXURE:
SECTION-A (DEMOGRAPHICS)
Q1. In which age category you lie?
Q2. What is your respective Education Background?

SECTION-B (TO MEASURE LEVEL OF FINANCIAL LITERACY)

LIKERT SCALE (STRONGLY AGREE, AGREE, NEUTRAL, DISAGREE, STRONGLY DISAGREE)
Q3. Ability to read, analyse, manage and communicate financial information
Q4. Ability to discern financial choices & discuss financial issues without discomfort
Q5. Mostly confident about investment decisions you take
Q6. Awareness about Basic concepts of management of money
Q7. Make informed effective choices among different insurance plans
Q8. I can check my bank statements for inconsistencies
Q9. Awareness about various Saving methods available
Q10. I can easily compare and analyse various Financial Institutions for credit related issues

SECTION-3 (TO MEASURE LEVEL OF FINANCIAL BEHAVIOUR)

LIKERT SCALE (1 = never, 2 = seldom, 3 = sometimes, 4 = often, 5 = always)
Q11. Bought bonds, stocks, or mutual funds
Q12. Saved for a long- term goal such as home, education, car
Q13. Began or maintained an emergency savings fund

Q14. Made only minimum payments on a loan

Q15.Paid off credit card balance in full each month
Q16. Stayed within your budget or spending plan
Q17. Maintained or purchase adequate health insurance plan
Q18. Maintained or purchased adequate life insurance