The impact of Financial Literacy on Individual Saving

Abstract

The research was undertaken to establish the factors that affect the levels of individual savings and some of these factors that the research looked at are financial literacy, gender, age of an individual, the education level, and the level of earnings and the family size of the individual. The data that was collected from the respondents’ was analysed using SPSS, Univariate analysis was carried out mainly using frequency tables for categorical variables, Bivariate analysis was done using correlations and conclusions were made at 5% level of significance and then a multivariate analysis was done that is a multilinear regression analysis The research findings revealed that there is a strong positive relationship between level of earnings and the individual savings. The study also revealed a negative relationship between age, family size, gender, education level and individual saving. From the multivariate analysis, it was found out that there is a negative relationship between financial literacy measured by respondents’ knowledge on financial institutions and individual saving. The research concludes that there are other factors that affect the individual savings apart from those that the research looked at and this is proved by the R squared which showed only 75.8% is being explained by the research factors that were regressed with the individual savings.