Financial Literacy in Relation to Financial Management

Abstract

Financial literacy is the capacity to analyze financial options, plan for the future, and respond appropriately to events. This study intends to look into the association between financial literacy and financial management. The study utilized a quantitative approach employing a descriptive normative survey of a modified survey questionnaire on financial literacy and financial management. The respondents of the study were the participants of the annual national conference of the Grace Gospel Church of Christ, which was held in Iloilo City on April 22-27, 2019 with 250 adult respondents. The questionnaire on Financial Literacy and Management Practices was used to measure the financial literacy of individuals. The questionnaire considered the most critical personal finance factors in the measurement of the level of financial knowledge literacy and the financial decision-making on financial practices (Cronbach’s Alpha results of Financial Literacy of 0.929, Financial Management of 0.738). It was found that the Normality Test utilizing the Shapiro-Wilk yielded significant results in almost all items. Hence, non-parametric tests were used in the statistical runs. To ensure the “do-no-harm,” after complying with the consenting forms, the researchers submitted them to the Ethics Review Committee as an assurance that the researchers followed the ethics protocol. Financial Literacy and Management Practices significantly differ in each of the three groups in the congregation namely Leaders (t=11.567, exact sig=0.000), Non-Leaders between financial literacy and management practices by rank in the congregation (t=12.431, exact sig=0.000), and Members (t=23.930, exact sig=0.000). T-Test showed significant differences between the financial management practice on Personal/Family Budget and Financial Decision-Making.