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    Financial Literacy and Financial Planning Among Teachers of Higher Education - A Study of Critical Factors of Select Variables

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    1. The study examined the financial literacy levels and financial planning among teachers in higher education. 2. It found that teachers generally have a satisfactory level of financial literacy and are aware of financial planning aspects. 3. Factor analysis identified 15 critical factors that influence financial literacy and planning, including retirement planning, tax planning, financial capacity, and risk assessment.

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    Financial Literacy and Financial Planning Among Teachers of Higher Education - A Study of Critical Factors of Select Variables

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    1. The study examined the financial literacy levels and financial planning among teachers in higher education. 2. It found that teachers generally have a satisfactory level of financial literacy and are aware of financial planning aspects. 3. Factor analysis identified 15 critical factors that influence financial literacy and planning, including retirement planning, tax planning, financial capacity, and risk assessment.

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    1. The study examined the financial literacy levels and financial planning among teachers in higher education. 2. It found that teachers generally have a satisfactory level of financial literacy and are aware of financial planning aspects. 3. Factor analysis identified 15 critical factors that influence financial literacy and planning, including retirement planning, tax planning, financial capacity, and risk assessment.

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    3K views10 pages

    Financial Literacy and Financial Planning Among Teachers of Higher Education - A Study of Critical Factors of Select Variables

    Uploaded by

    rap pedroso
    1. The study examined the financial literacy levels and financial planning among teachers in higher education. 2. It found that teachers generally have a satisfactory level of financial literacy and are aware of financial planning aspects. 3. Factor analysis identified 15 critical factors that influence financial literacy and planning, including retirement planning, tax planning, financial capacity, and risk assessment.

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    of 10

    FINANCIAL LITERACY AND FINANCIAL PLANNING AMONG

    TEACHERS OF HIGHER EDUCATION


    -
    A
    STUDY OF CRITICAL FACTORS OF SELECT VARIABLES

    MY JOURNAL
    PART I
    ABSTRACT
    Teachers are one of the most influential people in our society. By having financial
    literacy and managing personal finance properly, they can become a role model to their students
    and help them to develop as fiscally and socially responsible citizens. In this back ground, this
    study has been conducted to know the critical factors using factors analysis in enhancing the
    Financial Literacy Levels and study their impact on select variables of Financial Planning among
    teacher of higher education. The study found that the level of financial literacy among the
    teacher of higher education is satisfactory. It demonstrates the importance of contextual variables
    that may influence financial literacy and personal financial planning. It also explored the
    relationships among the select variables of financial literacy and personal financial planning
    using a methodology that is free from influence of the attribute of the respondents. Study found
    that the majority of teachers of higher education have a high level of financial literacy, aware of
    various aspects of personal financial planning and able to plan on their own irrespective their
    subject. It found that major factors such as Retirement Planning, Tax Planning & Control,
    Financial planning, Financial Capacity & Inflation are critical factors in personal financial
    planning.

    Key Words: Financial Literacy, Financial Planning, Critical Factors, Teacher of


    Higher Education

    INTRODUCTION:

    Financial literacy is the ability to use knowledge and skills to manage financial
    resources effectively for a lifetime financial well-being. “Unfortunately, many people have a
    weak grasp of basic principles of personal finance. General attitudes toward spending and saving
    behavior are troubling as well. What is lacking is not information, but rather the ability to
    interpret the information” (Lerman &Bell, 2006, p.1)
    In India, from the last decade, all the regulatory bodies are working towards boosting
    financial literacy, mainly the RBI, NCFE, NISM, IRDA, PFRDA, SEBI etc. Banks and AMCs
    are working towards boosting financial literacy. Having promoted the investor awareness
    programs across. India, now they have realized the importance of financial literacy education at
    school level. This enables future generations to manage their finances very well and avert
    problem while investing their money. A study on Global Financial Literacy indicated that ‘India
    has ranked 23rd out of 28 markets on VISA 2012 Global Financial Literacy Barometer’. The
    study pointed that Indians are very conscious regarding their savings and show highest saving
    rates among its global peers, but the awareness in households about investments is very low.

    The Reserve Bank has undertaken a project titled 'Project Financial Literacy’.
    According to it the status of financial literacy in India is not very good. Further, the condition in
    rural areas is very poor. Same is the case with women. Their literacy percentage is also not in
    very good which shows the importance of promoting financial literacy among women.

    REVIEW OF LITERATURE:

    Sumit Agarwal, Gene Amromin, Itzhak Ben-David, Souphala Chomsisengphet


    &Douglas D. Evanoff (2015) evaluated the financial literacy of a select group of residents in
    India who participate in on-line investment service. They found that the participants are
    generally financially literate. The probability of getting correct answers is higher for male
    respondents, generally increases with education level and the aggressiveness of the investor.
    Daniel Fernandes, John G. Lynch Jr., Richard G. Netemeyer (2014) conducted a meta-
    analysis of the relationship of financial literacy and financial education to financial behavior and
    concluded with a discussion of the characteristics of behaviors that might affect the policy
    maker’s mix of financial education, choice architecture and regulation as tools to help consumer
    financial behavior
    Bhushan, P., & Medury, Y. (2013) found that financial literacy level gets affected by
    gender, education, income, nature of employment and place of work and geographical region do
    not affect the level of financial literacy. The level of financial literacy among the working young
    in urban India is similar to the levels that prevail among comparable groups in other
    countries.Abraham. A, Michael A. G (2012) conducted a study among 250 UG and PG
    University students of Cape Coast and revealed that the age and work experience are positively
    related to financial literacy. But, level of study, work location, education, access to media and the
    source of education on money has no influence on financial literacy

    STATEMENT OF PROBLEM:
    Lack of financial literacy has been found to be a widespread phenomenon at a global
    level and is also clearly evident in developed economies Teachers are some of the most
    influential people in our society. By having financial literacy and managing personal finance
    properly, can become a role model to their students and help to develop fiscally and socially
    responsible citizens. Unfortunately, many teachers are still in the dark as to how to manage their
    finances. Some still have trouble in understanding interest, loan terms, and why it’s so vital to
    pay credit cards on time, etc. An individual with good financial sense may plan better his/her
    personal finance, particularly teachers who are key contributors in the development of society.

    OBJECTIVES:
    1. To examine the existence of financial literacy
    2. To study whether financial planning is used as a tool for financial optimization
    3. To find out the critical factors which will play a key role in enhancing financial
    literacy and planning of personal finance.
    HYPOTHESIS:
    1. There is no significant relationship between financial literacy and personal financial
    planning among teachers of higher education.
    2. There is no significant relationship among select variables of financial literacy and
    personal financial planning among teachers of higher education

    METHODOLOGY:
    A descriptive research design was undertaken to meet the said objectives.Descriptive
    statistics such as frequencies, percentages, means and standard deviation were used. Further,
    Factor analysis is used to find out the critical factors of select variables that play a key role
    enhancing financial literacy and planning of personal finance.
    DEMOGRAPHIC PROFILE OF THE RESPONDENTS:
    The study sought to determine the respondents’ demographic information and this included gender,
    marital status, age, educational qualifications and number of years of services (Table-1).

    Table-1: Demographic Profile of the respondents

    The study found that the majority of the respondents (70.3%) were male
    whereas 29.7% are female. It is found that 82.2% of respondents were married and 17.8%
    were not married. It is found that 19.5% of faculties from are having Ph.Ds and majority of
    respondents (80.5%) are having Post Graduation which is basic qualification to teach in
    higher education.

    ANALYSIS AND DISCUSSIONS


    Study (Table-2) found that the majority of teachers of higher education have a high level of
    financial literacy in terms of financial knowledge, financial behavior and financial attitudes. The
    financial behavior and financial knowledge have respectively a high rating mean of 3.98 and 4.2
    while the financial attitude has an average rating mean of 2.80.
    Factor Analysis:
    There are a numerous Quality factors which contribute in enhancing financial literacy
    and plan and execute personal finance. These factors were taken in the form of
    variables and respondents were asked to give their response on a five-point Likert scale
    ranging from strongly agrees to strongly disagree. Thereafter Factor analysis was
    carried out in order to condense these variables and find the specific factors which are
    the main reason behind most of the variation in the variable.
    \
    These factors are listed in descending order as factor 1 i.e., ‘Retirement Planning’ has
    the highest percentage of variance i.e.,7.132% and last critical factor i.e., ‘Cost of Finance’ has
    3.308%. Percentage of variance of an individual factor explains variance accounted for by each
    factor. Critical factors have a cumulative variance of 73.949% of total variance. Out of 45
    defined factors, 15 critical factors accounted nearly three fourth of variance. Hence, it can be
    concluded that factors Retirement Planning, Financial Planning, And Financial Management,
    Tax Planning and Control, Financial Capacity & Inflation, Risk Assessment & Distinction of
    Insurance Products, Estate Planning and Execution, Short Term Debt & Liquidity, Differential
    Uses of Financial Products, Spending and Saving, Variation in Estate Value, Time Value of
    Money, Debt Quality of Savings and Cost of Finance are the critical quality factors in Financial
    Literacy and Personal Financial Planning.

    CONCLUSION:
    This study focused on factors of financial literacy and personal financial planning among
    teachers of higher education. The study found that the level of financial literacy among the
    teacher of higher education is satisfactory. It demonstrated the importance of contextual
    variables that may influence financial literacy and personal financial planning. It also explored
    the relationships among the select variables of financial literacy and personal financial planning
    using a methodology that is free from influence of the attribute of the respondents. Study found
    that the majority of teachers of higher education have a high level of financial literacy, aware of
    various aspects of personal financial planning and able to plan on their own irrespective their
    subject. Factor analysis was carried out and found critical
    The findings were limited in the contextual scope due to the sample size, time and
    resource constraints, therefore further surveys should be carried out to generate more
    representative analysis. The study should not only be carried on the higher education teacher but
    should target teachers of all levels and employees of all sectors of the economy aimed at giving a
    clear picture of individuals planning of personal finance. The results therein should aid policy
    makers and practitioners in formulating appropriate strategies to bridge any financial literacy
    gaps.

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