An investigation into the factors causing financial literacy A survey of Municipal council of Nyeri employees
Musau, Daniel Mutisya
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In an increasingly risky and globalized marketplace, people must be able to make well-informed financial decisions. Interest in exploring the issues of personal finance, particularly money management, has tremendously increased in recent years due to the society's awareness on its importance. This research stressed 011 the causes of financial literacy, by looking into the individual's background, financial attitude, financial knowledge and family. Financial literacy is an active process, in which communicating information is only the beginning: empowering consumers to take action to improve their financial well-being is the ultimate goal. Financial literacy is critical for promoting access to finance by creating incentives and environments that promote desired financial behaviors such as saving, budgeting, or using credit wisely. The objective of this paper was to examine the causes of financial literacy and its effect on personal financial management practices that encompasses Savings practices, Expenditure practices, Debt management, Investment, Money management, retirement and unexpected expenses. Specifically, the study was conducted in Nyeri Municipal council. The variables for the study were social factors, economic factors, psychological factors and personal financial management practices. The target population was ninety two employees of the Nyeri Municipal council. A census study was conducted. As at July 20.12, there were ninety two employees in Nyeri Municipal council. For the purpose of collecting primary data the researcher used questionnaire. Data collected from respondents was both quantitative and qualitative in nature. The data collected was analyzed by means of descriptive statistical methods, which was facilitated by use of Statistical Packages of Social Sciences Programme. The data was analyzed using Pearson correlation analysis. This method was opted for because the study generated categorical data. A multiple regression of the form Y = ~o + ~ JX~ + B 2X2 +- ~ 3X3 + e was used to ascertain the extent to which independent variables predict financial literacy. The analyzed data is presented in form of charts, graphs which guide in making recommendations on causes of financial literacy and its effect on personal financial management practices.