The Impact of Behavioral Finance in Financial Literacy

Management of Young People

Research Proposal

Yi Mon Mya Thwin

(LC00026000517)

Supervisor:
Prof: Dr. Kyaw Nyein Aye

Lincoln University College

Faculty of Business and Accountancy

September 2020
Contents

1. Introduction ........................................................................................... 11

2. Overview or Background .................................................................... 11

3. Research Problem ................................................................................ 12

3.1 Research Objectives ............................................................................ 14

3.2 Research questions .............................................................................. 14

4. Scope of the Study............................................................................... 14

5. Relevance of the Study ........................................................................ 15

6. Research Methodology ........................................................................ 15

6.1 Research Design and Sampling........................................................... 15

6.2 Data Collection .................................................................................... 16

7. Data Analysis ...................................................................................... 16

8. Study Timeframe ................................................................................. 17

9. Summary ............................................................................................. 18

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 1. Introduction

For our daily life financing is such a ubiquitous investigation despite the discrepancy of

lacking knowledge and advocate to achieve more information on the study of finance. (Hardley,

2012). With the changing trend, young people are spending more and more money, so spending

knowledge and management are becoming an important part of everyone. Most young people

today use the money for a variety of social purposes. The generation gap is also a different

viewpoint for the financial literacy of management. While some decisions can be made based on

experience, age, and other factors. (Sholevar2, M. & Harris, L.2019) Unlike the old era, it was

used for necessities, such as beauty, cosmetics, health, household, and travel. By doing so,

factors that make them unaware of the necessaries to their balanced income and increased

expenses. For example, using telephones, social media, IoT, Internet banking, debit cards, credit

cards make it much easier to purchase their essentials and non-essential items through e-

commerce. Financial products and services are growing along with technology and other

marketing methods (Kagan. J, 2020) Once young people have a piece of financial knowledge

and ability to control behavioral finance, they can be creating their life for future security.

2. Overview or Background

Myanmar is one of the developing countries in Southeast Asia with a population of 54.1

million, 60% of whom are young people of 54.1 million. According to the 2018 survey, the

percentage of educated young people is 18.82 %. The number one financial problem in today’s

generation and the economy is the lack of financial literacy. (Blair 2016;3) Looking back at the

financial literacy of educated young people, although there is financial education, very few

people use it in real life. Financial literacy is a key life skill to participate in modern society. In

a complex world, children will grow up to be responsible for their own financial future.
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According to national surveys, adults are at the bottom of the financial ladder. They are

generally characterized by an inability to choose the right financial products and a lack of

interest in sound financial planning (OECD (2017), PISA 2015 Results (Volume IV)).I would

like to redefine the meaning of Financial Education. Financial literacy: It is the ability to

acknowledge that how to manage your financial resources. Basic financial literacy helps

people to become self-sufficient and achieve financial stability. Nowadays, most of the young

people have higher needs than the older generation. As a result, very few people can maintain

their spending balance along with their income (Kagan. J, 2020). In this epidemic situation, as

well as businesses, workers and professionals are losing income. Within such a situation, the

unemployment rate would likely to rise, and many families are experiencing economic

hardship. (World Bank,2020)

3. Research Problem

Today, young people used to spend as much as their income and sometimes spend more

than their income. The financial literacy management which made in early life can be costly

(Lusardi, Mitchell, & Curto, 2010). As a matter of fact, they spend money with various sort of

reasons,(1) “Psychological statistics refers to the purpose for which a person wants to allocate

money for a specific purpose”, (2) sometimes use it because you think it is more valuable.

“people often imitate the financial behaviour of the majority. The reason behind the mass

gatherings and sales is that cattle breeding is notorious in the stock market.” (3) sometimes

they spend the money because of Emotion “psychological differences can be caused by intense

emotions or anxiety; Anger It refers to making decisions based on very strong emotions or

emotional efforts, such as fear or emotion. Emotions are often the main reason people do not

make rational choices.” (4) And also, they spend tired of switching from one set of expenses to

another; “anchoring is related to a level of expenditure. Examples include

spending consistently on budget levels or spending on items of different satisfaction.” (5) Final
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one they spend the money because they think they are suitable for this kind of prize is “Self-

attribution refers to the desire to make choices based on the belief in self-knowledge. Self-

determination often comes from a strong belief in an area. In this category, individuals tend to

have a higher level of knowledge than others” (Kenton. W, 2020) thus why they spend more

without adjusting their income and expenditure.

Such over-exploitation does not have a negative impact on our working hours, but in the

face of such a global epidemic, the Burmese economy, like the global economy, has been

affected by job instability. Then many young workforces may have nothing to choose but to

worry about their future.

As per Myanmar age Breakdown in Fig (3.1) 2017, 48.6% of Myanmar’s population is

young people within (15 to 44) ages, and the economy depends largely on young people.

(Hussain. F, Mishra. S, 2015) If these young people who are important to the country do not

use their financial literacy effectively, they will probably bring out harm or impact on their

families, their environment and their country.

Fig (3.1)

Therefore, the purpose of this research proposal is to demonstrate that our young people

may have safe future life when they can efficiently manage their financial literature by making

good use of the principles of Behavioral finance theory, such as Mental Accounting, Herd

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Behavior, Emotional Gap, Anchoring, and Self-Attribution.

3.1 Research Objectives

The focus of the proposed research study is centered on the importance of understanding

the financial education and management of financial literacy with behavioral Finance.

i. To classify the Good self-attribution control can reduce unnecessary spending and save

more money.

ii. To identify even if you experience herd behavior, if you can manage yourself, you will

be able to control income inequality.

iii. To illustrate the Anxiety Anger Fear can also make you spend more money

iv. To clarify the Proper use of behavioral finance can help manage financial literacy, save

for the future and secure future security.

3.2 Research questions

The proposed research study aims to answer the following specific questions:

i. How are Self Attribution, Emotional gap, heard behavior in Behavioral finance

theory related to money management and personal saving?

ii. Why behavioral finance is important in financial literacy and how effective

future life security?

4. Scope of the Study

Therefore, everyone but not limited to, especially young person would have to study this

paper on behalf of our school River Samon Institute of Management to find out the real needs

for balancing their income and expenditure imbalances. The reason why we chose our school is
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mainly that a school is a place with numerous students with financial knowledge and a school of

over 600 students.

5. Relevance of the Study

The proposed research study seeks to explore how to manage and control the behavioral

finance for financial literacy and the impact of financial literacy on our future life security.

6. Research Methodology

Since the proposed research study seeks to point out the importance of Behavioral

Finance on financial literacy management in young people and their effectiveness in future life

security. The proposed study will quantitatively research approaches.

6.1 Research Design and Sampling

The proposed study will quantitative research approaches with Behavioral Finance

Theory (Self Attribution, Herd behavior, Emotional Gap) (Kenton, 2019) connection between

financial literacy of Money Management, Personal Saving and Investment, Personal Debt

Management and future life security (Vera, N, J, J 2015)

Self-Attribution

Money Future Life

Herd Behavior Management & Security
Personal Saving

Emotional Gap

Fig 6.1.1
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Accordingly, the proposed research study will undertake a random sampling descriptive

research approach target population of this study will be on the student of RSIOM in Yangon.

Sample respondents were selected from 600 students from RSIOM College. The primary data will

be collected from the online user due to COVID-19 risk reduction. By determining the margin of

error 5% and confidence level 95% the sample size will be 235. As Fig 6.1.2

Fig 6.1.2

6.2 Data Collection

The research involves young people who are basically knowledgeable about financial

management. Samples for the research were collected in this situation and selected colleges,

Refers to the River Samon Institute of management.

7. Data Analysis

This study will use both primary and secondary data. All the primary data will collect

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from young people of RSIOM’s student. The secondary data is based on previous research

papers; Articles and Websites. All the survey data will be analyzed using SPSS.

8. Study Timeframe

Timing is important to assess the feasibility of a paper submission process. In addition, it

provides researchers with timely guidance on their goals. Some researchers tend to

underestimate the amount of time and effort required to conduct research, as well as the

amount of time and effort involved, and in some cases the amount of unfinished work. Every

action requires time and effort. Each task must be given time to complete; From the

preparation of the proposal date to the last submission date of this paper.

Duration in Week
20-Sep 20-Oct 20-Nov
W W W W W W W W W W1 W1 W1 W1 W1
Task 1 2 3 4 5 6 7 8 9 0 1 2 3 4
Thesis Proposal
Chapter One
Chapter Two
Chapter Three
Chapter Four
Chapter Five
Prepare Survey
Questions
Data Collection
Data Analysis
To submit all Chapters
Resubmit all Chapters
Summit a Final Thesis

Fig 8.1

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 9. Summary
The main purpose of this research is to find out the financial knowledge and skills

of Myanmar's young people and how they can really put their financial literacy to good

use. Then we will point out the psychological reasons for how to manage and control our

financial literacy. Then we will show the systematic use of money and its benefits. The

method to be used in the thesis is the descriptive method.

Both primary and secondary data will be used in this paper to achieve research

objectives. A questionnaire was developed and validated for this purpose in previous

research. Primary Data will be collected from the students of RSIOM using a simple

random sampling method. The analysis will be performed using Excel statistic software

and SPSS software.

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 References

Blair, C. (2016). The Illiterate Executive: An Executive’s Handbook for Mastering Financial
Acumen. Fort St. Victoria, Canada: Friesen Press. p 3.

Hardley, M. Millennials Struggle with Financial LiteracyUSATODAY.com. Retrieved:

http://usatodayeducation.com/k12/wpcontent/uploads/2012/11/lesson33.pdf

Hussain. F, Mishra. S, (2015). ASEAN Financial Inclusion for What?

Kagan . J, (2020), Fintech 2017 from Aug 2020. Financial Technology & Automated

Investing https://www.investopedia.com/terms/f/fintech.asp

Kenton.W, (2020), Behavioral Finance https://www.investopedia.com/terms/f/fintech.asp

Lusardi, A., Mitchell, O.S., Curto, V. (2010). Financial literacy among the young: Evidence

and implications for consumer policy, CFS Working Paper, No. 2010/09,
http://nbn-resolving.de/urn:nbn:de:hebis:30-78626
Last Na de Bruin, W.B., Parker, A.M., & Fischhoff, B. (2007). Individual differences in

adult decision-making competence. Journal of Personality and Social Psychology,

92(5), 938-956. doi: 10.1037/0022-3514.92.5.938.

OECD (2017), PISA 2015 Results (Volume IV): Students’ Financial Literacy, PISA,

OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264270282-en

Sholevar2, M. & Harris, L.2019. Mind the Gap, Towards a New Definition for Financial

Literacy1, Research Centre for Global Finance Department of Finance and

Management, SOAS, University of London.

Vera, N, J, J. 2015. Financial Literacy and Behavioral Skills: The Influence of Financial

Literacy Level on Behavioral Skills, https://knepublishing.com/index.php/KnE-

Social/article/view/670/2027

Myanmar Economic Monitor June 2020: Myanmar in the Time of. Retrieved September 5,

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