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Financial Literacy; Strategies and Concepts in Understanding the Financial Planning With Self-Efficacy Theory and Goal Setting Theory of Motivation Approach

Author

Listed:
  • Mu'izzuddin

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia)

  • Taufik

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia,)

  • Reza Ghasarma

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia)

  • Leonita Putri

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia.)

  • Mohamad Adam

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia.)

Abstract

This article discusses the strategies and concepts in understanding the financial literacy with the approach of self-efficacy theory and goal setting theory of motivation. The discussion begins with the concept of behavioral finance that discusses links between financial concepts to the behavior, and then proceed with the concept and measurement of financial literacy of individuals altogether with some approaches and factors that may affect it. Self-efficacy theory and goal setting theory of motivation is proposed to be a predictive factor of the level of financial literacy with relevant constructs, there are two propositions proposed to predict the level of financial literacy: (1) Self-efficacy theory, in this case the motivational construct (manage finances, use credit cards less, and control debt), and (2) goal setting theory of motivation, in this case the goal commitment and goal specificity construct (financial planning).

Suggested Citation

  • Mu'izzuddin & Taufik & Reza Ghasarma & Leonita Putri & Mohamad Adam, 2017. "Financial Literacy; Strategies and Concepts in Understanding the Financial Planning With Self-Efficacy Theory and Goal Setting Theory of Motivation Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 182-188.
    • Handle: RePEc:eco:journ1:2017-04-25
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    References listed on IDEAS

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    2. Hilary, Gilles & Hui, Kai Wai, 2009. "Does religion matter in corporate decision making in America?," Journal of Financial Economics, Elsevier, vol. 93(3), pages 455-473, September.
    3. Renneboog, L.D.R. & Spaenjers, C., 2009. "Where Angels Fear to Trade : The Role of Religion in Household Finance," Discussion Paper 2009-34, Tilburg University, Center for Economic Research.
    4. Adriana ZAIT & Patricea Elena BERTEA, 2014. "Financial Literacy – Conceptual Definition and Proposed Approach for a Measurement Instrument," The Journal of Accounting and Management, Danubius University of Galati, issue 3, pages 37-42, December.
    5. Sondra G. Beverly & Marianne A. Hilgert & Jeanne M. Hogarth, 2003. "Household financial management: the connection between knowledge and behavior," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jul, pages 309-322.
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    Cited by:

    1. R. M. Ammar Zahid & Safia Rafique & Muzammil Khurshid & Wajid Khan & Ikram Ullah, 2024. "Do Women’s Financial Literacy Accelerate Financial Inclusion? Evidence from Pakistan," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4315-4337, March.
    2. Liu Hong Shan & Kenny S. L. Cheah & Serrene Leong, 2023. "Leading Generation Z’s Financial Literacy Through Financial Education: Contemporary Bibliometric and Content Analysis in China," SAGE Open, , vol. 13(3), pages 21582440231, August.
    3. Khurram Rehman & Md Aslam Mia, 2024. "Determinants of financial literacy: a systematic review and future research directions," Future Business Journal, Springer, vol. 10(1), pages 1-25, December.

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    More about this item

    Keywords

    Financial Literacy; Self-efficacy; Goal Setting;
    All these keywords.

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G3 - Financial Economics - - Corporate Finance and Governance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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