AWARENESS ON FINANCIAL PLANNING AMONG UNIVERSITY STUDENTS

Prepared for:Cik Masliana Tamrin

Puan Anidah Aziz

Prepared by:Nurul Nadeyya Atiqah bt Hj Rahmat

2008404062Final Year Marketing Student

Background of Company

NAZRIL IDRUS Founder of LVG

Consultants

JASHIDA KAMAL Co – founder of LVG

Consultants

•Established in 2006•Personal Financial Planning Services Cash flow managementUnit trust investmentsInsuranceWill – writing

• Financial Seminars

Money Sifu Seminar

Background of Study

Poor financial planning understanding amongst today’s youths.

Study loan default Failed to settle vehicle loans

Why they caught in bankruptcy?

50% of Malaysians involved in bankruptcy are University students and young working adult.

Credit card debt

Problem Statement

Students are incompetent in handling their personal financial management.

Prior research conducted by Haiyang Chen and Ronald P. Volpe found that university students have

low understanding on personal finance.

Students tend to take for granted about financial planning because they think they are still young and

it’s too early for them to think about it.

They spend more than what they earned

Research

Objective

1

•To determine level of awareness on financial planning among university students.

Objective

2

•To investigate factors that contribute to financial literacy.

Objective

3

•To identify the most contributing factor that influences university students on financial planning.

Research Questions

RQ 1

•How aware university students are when its come to financial planning?

RQ 2

•What are factors that can influence university students to become financial literate?

RQ 3

•What is the most contributing factor that influences university students on financial planning?

Respondents consisted of undergraduate students from Universiti Teknologi Mara (UiTM) Cawangan Melaka, Kampus Bandaraya Melaka.

Public Universities

Students

Private Universities

Students

Scope of Study

Limitations of the Study

1. Small number of respondents compared to total population.

2. Existence of uncontrollable factors among respondents

Unwillingness or reluctant to answer in disclosing personal information regarding on their money management

Literature Review

• Financial Literacy

Literature Review

• Financial Planning

Theoretical Framework

Awareness On Financial Planning

Demographic factors

Family Members

Business Degree

Independent Variables

Dependent Variable

(Sources taken from Joyce K.H. Nga, Lisa H.L. Yong and Rathakrishnan D. Sellappan & Haiyang Chen and Ronal P. Volpe)

Research MethodologyResearch design - Descriptive research.

- Conducted to discover and determined the

characteristics of a population.

Population – University students in public and private

universities. The total population is around half a million.

Sampling frame - Sampling frame is representation of the

elements of the target population.

- Sample from students at UiTM Cawangan

Melaka Kampus Bandaraya Melaka.

Research MethodologySample size - Non – statistical method is applied to determine the appropriate sample sizes. - Sample size is determined by the previous experience that serves as rough guidelines. - Sample sizes larger than 30 and less than 500 are appropriate for most research.

Sample size – Due to some restrictions and time constraint, researcher

finds it is adequate enough to have a sample size of 80

respondents.

Research Methodology

Data Collection Method

Primary Data

Questionnaire

Secondary Data

Books

Journals

The Internet

Research Methodology

SPSS Computer Program

Frequencies

Regression analysis

Correlations

Reliability test

Data Analysis & FindingsReliability Test

Reliability Statistics

Cronbach's Alpha N of Items

.811 17

Reliability test

•Indicates consistency and stability of the data obtained from the survey whether it is reliable or not.

Theory•The closer Cronbach’s alpha is to one, the higher the internal consistency reliability.

Thus•It can be concluded that the consistency of the data obtained is good.

Data Analysis & FindingsRO 1: To determine level of awareness on financial

planning among university students.

• Find total mean for Dependent Variable• Use statistical of frequency to determine level of awareness

Mean for Total of Awareness on Financial Planning Among University Students

N Minimum Maximum Mean Std. Deviation

MeanTotalLevelOfAwareness 80 1.00 5.00 4.0125 .81898

Valid N (listwise) 80

Scale Range Level of Awareness

1.00 – 2.33 Low

2.34 – 3.67 Medium

3.68 – 5.00 High

Statistical Frequency Description for Mean Scale Range and Level of Awareness

Thus •It was found that university students possess high awareness on financial planning

Data Analysis & FindingsRO 2: To investigate factors that contributes to

financial literacy.

• Previous research found that family members, demographic factors and business degree play an important roles towards financial literacy.• To reinforce previous findings by quantitatively, researcher decided to measure the relationship between each independent variables and dependent variable by using correlations and by referring to the Pearson correlation (r).• Pearson correlation (r) would tell us the direction of the relationship (either negative or positive).

Table 4.4: Correlations between independent variables and dependent variableMeanTotalLevelOfAwareness MTF MTD MTBD

MeanTotalLevelOfAwareness

Pearson Correlation 1 .506** .186 .379**

Sig. (2-tailed) .000 .099 .001N 80 80 80 80

MTF Pearson Correlation .506** 1 .347** .390**

Sig. (2-tailed) .000 .002 .000N 80 80 80 80

MTD Pearson Correlation .186 .347** 1 .254*

Sig. (2-tailed) .099 .002 .023N 80 80 80 80

MTBD Pearson Correlation .379** .390** .254* 1Sig. (2-tailed) .001 .000 .023N 80 80 80 80

Data Analysis & FindingsRO 2: To investigate factors that contributes to

financial literacy.

• Pearson correlation for family members (MTF), demographic factors (MTD) and business degree (MTBD) were 0.506, 0.186 and 0.379 respectively.• The closer the Pearson correlation value to -1 or +1, the stronger relationship it possess.• Hence, all three variables indicate positive relationship with level of awareness on financial planning among university students.

Correlation significant between independent and dependent variable

Thus •Preceding findings by previous researchers are proven. Family members, demographic factors, and business degree play an important roles towards financial literacy.

Data Analysis & FindingsRO 3: To identify the most contributing factor that

influences university students on financial planning.

• Regression analysis is conducted to show which factors has the most influential towards dependent variable. • After the analysis, only two variables proof to be strong relationship with dependent variable. ( Family members & Business degree).

Table 4.5: Coefficients between independent variables and dependent variable

ModelUnstandardized Coefficients

Standardized Coefficients

t Sig.B Std. Error Beta1 (Constant) 1.638 .477 3.433 .001

MTF .497 .127 .427 3.925 .000MTD -.020 .116 -.018 -.175 .862MTBD .193 .094 .217 2.056 .043

2 (Constant) 1.604 .432 3.713 .000

MTF .491 .121 .422 4.062 .000MTBD .190 .092 .215 2.064 .042

a. Dependent Variable: MeanTotalLevelOfAwareness

Data Analysis & FindingsRO 3: To identify the most contributing factor that

influences university students in financial planning.

•The other variable which is demographic factor is removed from the analysis data. • The exclusion indicate that demographic factor play the least significant relation with dependent variable

Table 4.6: Variables Entered/RemovedModel Variables

Entered Variables Removed Method1 MTBD, MTD,

MTFa. Enter

2 . MTD Backward (criterion: Probability of F-to-remove >= .100)

a. All requested variables entered.

b. Dependent Variable: MeanTotalLevelOfAwareness

Thus •The most contributing factor that influences university students in financial planning happened to be family members.

Conclusions & Recommendations

Conclusions

•Despite bankruptcy issue that is worsening among university students, they actually do have high awareness on financial planning. •However, awareness alone is insufficient if action to do financial planning is not undertaken.

Recommendations

•Effort need to be intensifies to instill awareness on financial planning among university students.•Related bodies like educators, financial institutions and regulators need to work hand in hand to design special financial planning courses in helping the students to be more knowledgeable about personal financial planning.