CHAPTER 2

2.1 Introduction
The literature review is the survey of what past researchers were achieved in identifying the
relationship between age, gender, ethnic, education level, and financial literacy towards
financial planning. This literature review is used as a form of perspective to complete this
study and notwithstanding reinforce any confirmation communicated in this endeavour paper.

2.2 Review of the Literature

A research by Neha Garg & Shveta Singh (2018) explored the level of financial
literacy among youth in the world. The study particularly, focus at how socio-economic and
demographic factors such as age, gender, marital status and income influence financial
literacy level of youth and whether there is any interrelationship between financial
knowledge, financial attitude and financial behaviour. This literature review consists of seven
key sections. The first section of this paper reviews the conceptual definitions of youth.
Second part summarises the literature on financial literacy. Third, fourth and fifth section
summarises the literature on the components of financial literacy, i.e. financial knowledge,
financial attitude and financial behaviour, respectively. Sixth section reviews the empirical
studies on the influence of socio-economic and demographic factors on financial literacy
level. Seventh section summarises the literature on interrelationship between financial
knowledge, financial attitude and financial behaviour. This paper also aims to understand the
influence of various factors influencing the financial literacy as understanding the factors that
contribute to or detract from the acquisition of financial literacy among youth can help in
making policy interventions targeted at youth to enhance their financial well-being.
Findings of the study reveals that the financial literacy level among youth is low across the
most part of the world that has become a cause of concern. Also, it has been observed that
various socio-economic and demographic factors such as age, gender, income, marital
status and educational attainment influence the financial literacy level of youth and there
exists an interrelationship between financial knowledge, financial attitude and financial
behaviour. There exist no significant association between financial literacy and employment
structure but significant association exists between years of work experience and financial
literacy.  After going through various studies related to the financial literacy, it has been
observed that financial literacy has been of utmost interest to various researchers,
organisations and economies since last two decades.
Dirk Brounen, Kees G. Koedijk, Rachel A.J. Pownall (2016) conducted a study on household
financial planning and savings behaviour.  In this paper, they examine behavioural factors,
which lead households toward savings and financial planning across a panel of 1253 Dutch
households. In line with the available literature, they find that an individual’s propensity to
save decreases with age and is higher among the financial literate.  Moreover, they also
find that saving behaviour varies across generations, and is significantly dominant
among baby boomers. This generation effect, however, weakens once we account for more
individual specifics. Their results offer evidence for parental influence, and for the effects of
the psychological and behavioural metrics of numeracy, self-efficacy, locus of control
and future orientation. A good understanding of these personality variables helps to explain
why some take financial responsibility while others do not. Besides these variables that
capture youth and parental influence, they also included a set of questions that proxy some
metrics for psychological and behavioural variables that have been addressed in related
literature, and that we would like to include in our examination of the cross sectional
variation on financial decision making. Dynan et al (2004) report saving rates below 10
percent for the lowest U.S income quintile, numbers that increase with income to over 20
percent for the fifth quintile. Compared to the respondents born after 1975, these baby
boomers are 23.4% more likely to save for later, although their time horizons are shorter

Philippas, Christos Avdoulas (2019), researched on financial well-being among generation z.

This study aims to be the first among its kind to evaluate the relation between financial
literacy, financial fragility, and financial well-being in parallel with identifying their
determinants. For this purpose, they design and distribute a questionnaire to a random sample
of 456 university students in Greece. The university students represent Generation Z that
experienced the effects of a unique in duration and consequences financial crisis. They
analyse the data by using cross-tabulations, chi-square tests, logistic regressions, and a
marginal effect analysis. According to statistics released by the Hellenic Statistical Authority
for the academic year 2018–2019, there were 396,814 undergraduate students in all Greek
universities. The survey used in this study covers 456 university students from Departments
of Business Administration (55%) and Departments of Statistics and Insurance Science
(45%). The data were collected through the use of a paper version that was self-
administered. This research was conducted during the spring semester in 2016. Mostly senior
students were targeted. Furthermore, the participation was optional and confidentiality
measures were taken for personal data. Senior business school students were thought of as the
primary group of interest due to more years of exposure to higher education and, specifically,
business education. The results show that male students, students who keep expense records,
or their father is highly educated are more financially literate. We also examine the
dimensions of financial fragility, and the results show that financially literate students are
better able to cope with an unexpected financial shock. Thus, financial literacy can be a key
driver of financial well-being among Greek university students. Furthermore, we discuss the
likely policy prescriptions while accounting for related behavioural aspects and technological
developments.
Alfred M. Wu, Wai-Sum Chan, et al (2015) conducted research on the gender differences in
financial literacy among hong kong workers. They aim to fill the research gap by addressing
these two issues, which are to assess whether there is a gender difference in financial
literacy among Hong Kong Chinese workers and to examine whether such gender
differences, if they exist, can be explained by sociodemographic variables and or the social
and psychological factors associated with retirement savings. The three financial
literacy items included in this study were originally designed for the 2004 Health and
Retirement Study (HRS). Age Education Number of children Spousal support Friend support
Socialization in childhood Parents as model Social regulation Risk tolerance Time orientation
Computation ability Financial management Self-reported financial knowledge Amount of
retirement private savings Retirement goal clarity Adequacy of retirement savings 1.95 (0.85)
1.70 (0.84).
Gender differences were found in financial literacy, spousal support for retirement
savings, risk tolerance, computational ability, and perceived financial knowledge. Male
workers had higher levels of financial literacy, spousal support for retirement savings, risk
tolerance, computational ability, and perceived financial knowledge than female workers.
Results proved that financial literacy is significantly greater among male than female workers
in Hong Kong. These differences persist even after accounting for age, marital status, spousal
support for retirement savings, risk tolerance, computational capacity, and perceived financial
knowledge. They show that computational ability is a strong correlate of financial literacy;
those who have higher levels of the former are more likely to demonstrate more of the latter.
These findings are consistent with another recent study in which cognitive ability is strongly
associated with financial literacy in young adults.

A study was done by Albeerdy & Behrooz Gharleghi in 2015 on determinants of the financial
literacy among college students in Malaysia. Data for this study was collected through self-
administered questionnaire and distributed through convenient sampling method. A total of
105 completed and usable questionnaires have been collected. Pearson Correlation analysis
and multiple regression tables were used to determine the interrelation of different variables
in financial literacy. The purpose of this study is to investigate the factors influencing the
financial literacy among university students in Malaysia. Empirical results show that there is
a significant relationship between independent variables of education, and money attitude
towards the dependent variable of financial literacy, while there found no relationship
between financial socialization agents and financial literacy. This study is important so as to
understand how these independent variables affect the literacy rate of young adults. Efforts
may be put to strengthen those variables in order increase the literacy rates of those university
students.
Leena B. Dam et al,. (2017) did a research on the relationship between age and income with
financial planning.  Financial planning is a comprehensive evaluation of an individual's
current pay and future financial state by using current known variables to predict future
income, asset values and withdrawal plans. Financial literacy or financial education can
broadly be defined as providing familiarity with and understanding of financial
market products, especially rewards and risks, in order to make informed choices. The
Indian financial market today is inundated with a wide array of products. Till 1990s
Indian economy being closely guarded, limited variety of financial products were available.
Financial planning is a scientific process which aims at building up the wealth of the investor
in a planned and systematic manner. Method that they used is the one-way analysis of
variance (ANOVA). This study attempts to analyze the relationship between age and income
with financial planning. It also studies whether age and income have a positive correlation
with the choice of investment products. Analysis show that majority of individuals have set
financial goals. But they are unaware of how to meet their future financial goals. Also
investors are not correctly aware of which product to invest in given their age and income
bracket. Results show that the p value is more than 0.05 which means there is no significant
difference in the mean score of ‘I take help from professionals/financial consultant for
personal financial planning’ to the selected age group. This study is evidential that ‘Financial
Planning’ is a forbidden topic left to be debated, discussed and decided by the male members
of the family closed door. To live exclusively on own savings post retirement, it is imperative
to set financial goals and plan taking expert guidance from a financial consultant at the
beginning of the career. People taking advice from friends and family rather than
professionals argue that the cohort of financial planning professionals lack to offer unbiased
choice to the investors. Some investment option like equity investments seek to have higher
returns but with equivalent higher risk. On the other hand investments like PPF are safe
investment avenues but with its shortcomings like illiquidity and low rate of return.

J.D Jayaraman,& Saigeetha Jambunathan (2018) located that is financial education is a

significant however frequently ignored ability that is crucial for youngsters. The analysts
estimated financial literacy levels among secondary school understudies in India and
discovered low degrees of execution on standard proportions of financial proficiency. The
level of right score on the basic financial education questions was 45% and on the modern
money related proficiency addresses the score was 44%. Budgetary proficiency levels in India
were seen as more unfortunate than those in created nations. Sexual orientation contrasts were
found, with females surpassing guys, contradicting to discoveries in created nations.
Understudies who sought after the trade/financial aspects stream of instruction were found to
have more prominent degrees of money related education than understudies seeking after the
science stream.  This study used a survey research design. A survey was used to
measure financial literacy. The survey attempted to test performance in four domains
of financial literacy – saving, investing, borrowing, and insurance. The survey was designed
by adapting different surveys from extant literature on measuring financial literacy. The
survey consisted of 28 questions including questions on demographics.Results from the study
shows that understudies, in spite of having significant levels of numeracy, they were not able
exchange that information to do monetary calculations. Parental association was additionally
found to affect money related education. Meetings with understudies featured the way that
comprehension of cultural and macroeconomic impacts of monetary proficiency was low.
These discoveries loan support for secondary school budgetary training which includes
guardians and stresses common sense hands-on application, cultural and macroeconomic
impact, as a methods for improving money related proficiency.

Anokye, Siaw Frimpong (2017) studied on financial literacy and financial planning:
Implication for financial well-being of retirees. Financial or economic well-being in
retirement has been the subject of interest for researchers. Financial well-being, on the other
hand, is defined as a state of being wherein a person can fully meet the current and ongoing
obligation, can feel secure in their financial future, and is able to make choices that allow
enjoyment in life (OECD, 2015). People with high levels of financial well-being have the
financial. A cross-sectional survey strategy was employed on 400 respondents randomly
selected from 1500 members of the Pensioners Association in Cape Coast Metropolis. The
survey strategy is popular and normally used in business and management research, and is
most often used to answer who, what, where, how much and how many questions. Surveys
are popular as they allow the collection of a large amount of data from a sizeable population
in a highly economical way, which is often obtained by using a questionnaire administered to
a sample. The sample size was arrived at by using the Saunders (2011) sample determination
table. They began the analysis by assessing the measurement model as depicted for the
construct reliability, convergent validity, and discriminant validity. The results show that all
the constructs have composite reliability above the minimum of 0.7 in all cases, an indication
that the constructs are reliable. They have analysed the financial well-being of retirees in
Cape Coast Metropolis to confirm the relevance of financial literacy, retirement planning and
family support in attaining financial well-being of retirees. The findings of the study show
that financial literacy, retirement planning and family support positively influence financial
wellbeing of the retiree.
The effect of family support and retirement planning on retirees’ financial well-being is
stronger than the one of financial literacy The findings imply that finance literacy and
retirement planning should be promoted. It has been observed that low-income crowds out the
importance of financial literacy on retirement planning and financial behaviour

A research by Novia Dewanty, Yuyun Isbanah (2018) explored the Determinants of the
Financial Literacy: Case Study on Career Woman in Indonesia. Financial literacy is one of
the relevant facts in improving the economy.  The purpose of this study was to examine the
influence of demographic factors and financial socialization agent on financial literacy.
This study aims to analyze the influence of marital status, education level, income, and age
and financial socialization agent on financial literacy that divided into three dimensions. This
study uses a type of causality research. Causality research is a type of research used to obtain
evidence of causality. The results shows that the industrial sector, trade, real estate, and
services in Surabaya showed growth of 51.78% whereas the information and communication
sector as well as financial services and insurance only amounting to 5.33% and 5.46%. The
respondents in this research are 100% female with 56% (56 respondents) bank worker and
44% (44 respondents) non-bank worker. Test of validity shows that there is an indicator of
financial literacy that has outer loading less than 0.7 , so it will drop from the model and
reestimated. The conclusions of this study are Marital status does not affect the financial
literacy. These findings suggest that single women tend to manage their finances while
married women have different responsibilities in financial decision-making. The most
influential social agents on financial information of women workers in the financial sector
were the families of 78%, peers and media each at 72.4%

A more recently conducted study by Umi Widyastutia, Ati Sumiatia et al,. (2020).
Policymakers concern on the strategy to enhance the level of financial literacy (Grohmann &
Menkhoff, 2015). Both developed and developing countries are recognizing the importance
of financial literacy and considering to invest the resources through financial education
programs to enhance financial literacy. Some previous studies have been conducted to prove
the impact of financial education on financial literacy. This study aims to determine the effect
of financial education, financial literacy, and financial behaviour from teacher’s perspective.
Financial behaviour reflected four types of behaviour, i.e. saving behaviour, shopping
behaviour (Varcoe, Martin, Devitto, & Go, 2005), longterm and short-term financial
behaviour (Wagner, 2015). It measured using twenty-one items to represent financial
behaviour. Financial education was measured using a nominal scale which is adapted from
Alhenawi (2013). After validity and reliability test were proven, the step is hypothesis testing.
This study shows that the first hypothesis is rejected because the p-value is more than level of
significance 0.05 This result indicates an insignificant influence for this hypothesis. The third
hypothesis examines the direct impact of financial education on financial behaviour, but the
result shows that the hypothesis is rejected. It reveals that there is an insignificant positive
impact of financial education on financial behaviour. This study has concluded that there was
a positive influence between financial literacy on financial behaviour. We have noted that
financial education was defined as a process to improve people’s understanding about
financial concept and products or even develop skill through information they got. They will
have an awareness to act in a wise financial decision to achieve financial welfare. The
different measurement of financial education enables to give a different evidence