Impact of financial literacy on saving and spending behavior of working people in Kathmandu metropolitan

Abstract

This paper has discussed how financial literacy affects the saving and spending habits of working Kathmandu Metropolitan. The specific objectives have been to measure the levels of FK, FA, FB and FS and to measure their relationships with SB and SPB and to discuss their respective and interactive effects on the saving and spending decisions. The research design has assumed a descriptive and causal-comparative research design. Kathmandu Metropolitan has been dominated by working people and a final revised sample of 413 respondents has been chosen on the convenience basis. A structured questionnaire has been used to collect primary data, and secondary data have been generated upon the basis of the available relevant literature. Reliability testing, demographic analysis, descriptive statistics, correlation analysis, and multiple regression analysis have been applied in analyzing the data. Dependent variables have been taken as SB and SPB, whereas the independent variables have been taken as FK, FA, FB, and FS. High internal consistency has been found in the reliability results of all constructs. The demographic findings have reflected that there are more male respondents with 25-45 age brackets and bachelors or masters. The descriptive statistics have demonstrated moderate high scores of all financial literacy measures and generally disciplined saving and spending habits. Correlation analysis has revealed that FK, FA, FB, and FS are significantly positively correlated with SB, as well as that FA, FB and FS are significantly positively correlated with SPB. Regression findings have affirmed that four variables have significant predictive values of SB but FA, FB and FS are significant predictors of SPB with FB and FS being the strongest predictors. The research has found that the financial literacy plays an important role in the formation of the level of saving and expenditure and has suggested the necessity of the specific financial education and skills-based interventions.