UNIVERSITY OF NAIROBI

SCHOOL OF BUSINESS

MASTER OF BUSINESS ADMINISTRATION

COURSE: FINANCIAL SEMINAR

COURSE CODE: DFI 605

TOPIC: PERSONAL FINANCE

NAME REG. NOARTHUR OMBATI D61/67102/2011ESTHER NJERU D61/80299/2012JOSEPH MACHARIA D61/75476/2012MARTIN NYAGA D61/79015/2012

DATE: 13TH JULY 2013

TABLE OF CONTENTS

CHAPTER ONE..................................................................................................................2

1.0 INTRODUCTION....................................................................................................2

1.1 Definition of Personal Finance.............................................................................2

1.2 History of Personal Finance..................................................................................2

1.3 Objectives of Personal Financial Planning...........................................................4

1.4 Steps in Personal Financial Planning....................................................................4

1.5 Areas of Focus......................................................................................................6

1.6 Personal Factors to Consider in Financial Planning.............................................8

1.7 Theoretical Framework.........................................................................................9

CHAPTER TWO...............................................................................................................12

2.0 LITERATURE REVIEW.......................................................................................12

2.1 Global Studies.....................................................................................................12

2.2 Local Studies.......................................................................................................16

CHAPTER THREE...........................................................................................................18

3.0 EXISTING GAPS IN PERSONAL FINANCE STUDIES....................................18

REFERENCES..................................................................................................................19

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CHAPTER ONE

1.0 INTRODUCTION

1.1 Definition of Personal Finance

Personal Finance refers to the use of the principles and techniques of corporate finance in

an individual's money affairs, especially the methods of allocation of financial resources.

Its objective is financial security and independence so that an individual or a family can

meet expected expenses and withstand monetary emergencies. It involves application of

principles from a variety of disciplines such as economics, sociology, psychology, adult

learning, and counseling to the study of ways that individuals, families, and households

acquire, develop, and allocate monetary resources to meet their current and future

financial needs (Hira, 2009).

Personal finance refers to the financial management of which an individual or a family

unit is required to make to obtain, budget, save, and spend monetary resources over time,

taking into account various financial risks and future life events. Various tools used to

manage personal finance are financial reports, bank accounts, fixed income and equity

investments. It also includes techniques related to cash flow management; risk

assessment and management; and planning of taxes, retirement, and estates (Schuchardt

et al. 2007).

1.2 History of Personal Finance

Consumer economics was an early branch of personal finance and encompassed topics

related to consumer choice, production and marginal utility of wealth. Hazel Kyrk PhD, a

pioneer in consumer economics was instrumental in developing the field of family and

consumption (or consumer) economics. During the first world war Dr. Hazel made

significant publications on consumer choice and the impact of such choices in

production. Her work laid foundation in the groundwork for the development of the field

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of consumption economics. Her later work laid the foundation for the field of family

economics. She became an advocate for incorporating the insights of economics into the

field of home economics and helped create the Division of Family Economics in the then

American Home Economics Association. (Kyrk, 1923)

The financial systems of the 21st Century have been growing with speed, sophistication

and becoming more complex. The economic and social environment in which people take

personal financial decisions has changed – and this change is set to continue with the

dynamic and ever changing technology. Financial products and services have multiplied

along with technological and other means of marketing them. People have increasingly

taken individual responsibility for their financial affairs unlike in the past when the

governments provided basic necessities like education, provision of heath care and even

subsidized food prices. This calls for skills that can be obtained through personal

financial education. (Murphy & Staples, 1979).

In recent years, the need for financial education has gained the attention of a wide range

of entities including banking companies, government agencies, grass-roots consumer and

community interest groups, universities, schools, and other organizations. Numerous

factors have led to a complex, specialized financial services marketplace that requires

consumers to be actively engaged if they are to manage their finances effectively. The

prevailing concern is that consumers lack a working knowledge of financial concepts and

do not have the tools they need to make decisions most advantageous to their economic

wellbeing. However, a complex and specialized financial services marketplace requires

consumers to be informed and actively engaged if they are to manage their finances

effectively. Under these circumstances, there is a renewed attention to personal finance

education. This subject matter is currently gaining attention from various quarters of

society, such as academia, government, corporations and nonprofit organizations;

however, many are not aware of the rich history and sources of literature in the field.

(Short, 1984).

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1.3 Objectives of Personal Financial Planning.

People enlist the help of a financial planner because of the complexity of performing the

following:

Providing financial security and ensuring that all goals of personal finance are

met.

Finding direction and meaning in one's financial decisions.

Understanding how each financial decision affects other areas of finance; and

Adapting to life changes to feel more financially secure.

The best results of working with a comprehensive financial planner, from an individual

client or family's perspective are:

To create the greatest probability that all financial goals (anything requiring both

money and planning to achieve) are accomplished by the target date,

To have a frequently-updated sensible plan that is proactive enough to

accommodate any major unexpected financial event that could negatively affect

the plan, and

To make intelligent financial choices along the way (whether to "buy or lease"

whether to "refinance or pay-off" etc.), (Seligman, D. 1984).

1.4 Steps in Personal Financial Planning

1.4.1 Establish Financial Goals

Few people begin a vacation without having a specific destination in mind. In contrast,

millions of people make significant financial decisions without having a specific financial 4

destination. Goal setting is critical to creating a successful financial plan, but few people

actually set clearly defined goals. By leading the client through the goal-setting exercise,

the financial advisor not only helps establish reasonable, achievable goals, but also sets

the tone for the entire financial planning process. Clients typically express concern about

such topics as retirement income, education funding, premature death, disability,

taxation, qualified plan distribution, and a myriad of others (Godwin and Carroll, 1986).

1.4.2 Gather Relevant Data

Because there are many client concerns that a financial advisor may need to address, the

advisor will have to gather considerable information from the client. Defining the client’s

current situation, determining what the client’s desired future situation is and when it is to

be achieved, and establishing what the client is willing and able to do in order to get there

require information. This information must be accurate, complete, up-to date, relevant to

the client’s goals, and well organized. The more complex the client’s situation and the

more varied the number of his or her goals, the greater the information-gathering task,

(Seo & Lim 1984).

1.4.3 Analyze the Data

Once the relevant information about the client has been gathered, organized, and checked

for accuracy, consistency, and completeness, the financial advisor’s next task is to

analyze the client’s present financial condition. The objective here is to determine where

the client is now in relationship to the goals that were established by the client in step

one. This analysis may reveal certain strengths in the client’s present position relative to

those goals, (Seo & Lim 1984).

1.4.4 Develop a Plan for Achieving Goals

After the information about the client has been analyzed and, if necessary, the goals to be

achieved have been refined, the advisor’s next job is to devise a realistic financial plan

for bringing the client from his or her present financial position to the attainment of those

goals. Since no two clients are alike, a well-drawn financial plan must be tailored to the

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individual, with all the advisor’s recommended strategies designed for each particular

client’s needs, abilities, and goals. The plan must be the client’s plan, not the advisor’s

plan. It is unlikely that any individual advisor can maintain an up-to-date familiarity with

all the strategies that might be appropriate for his or her clients. (Seo & Lim 1984).

1.4.5 Implement the Plan

The mere giving of financial advice, no matter how solid the foundation, on which it is

based, does not constitute financial planning. A financial plan is useful to the client only

if it is put into action. Therefore, part of the advisor’s responsibility is to see that plan

implementation is carried out properly according to the schedule agreed upon with the

client. Financial plans that are of limited scope and limited complexity may be

implemented for the client entirely by the advisor, (Seo & Lim 1984).

1.4.6 Monitor the Plan

The relationship between the financial advisor and the client should be an ongoing one.

Therefore, the sixth and final step in the financial planning process is to monitor the

client’s plan. Normally the advisor meets with the client at least once each year to review

the plan, or more frequently if changing circumstances warrant it. The first part of this

review process should involve measuring the performance of the implementation

vehicles. Second, updates should be obtained concerning changes in the client’s personal

and financial situation. Third, changes that have occurred in the economic, tax, or

financial environment should be reviewed with the client, (Seo & Lim 1984).

1.5 Areas of Focus

The six key areas of personal financial planning, as suggested by the Financial Planning

Standards Board, are:

1.5.1 Financial positionThis is concerned with understanding the personal resources available by examining net

worth and household cash flow. Net worth is a person's balance sheet, calculated by

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adding up all assets under that person's control, minus all liabilities of the household, at

one point in time. Household cash flow totals up all the expected sources of income

within a year, minus all expected expenses within the same year.

1.5.2 Adequate protection

This is the analysis of how to protect a household from unforeseen risks. These risks can

be divided into liability, property, death, disability, health and long term care.

1.5.3 Tax planningTypically the income tax is the single largest expense in a household. Managing taxes is

not a question of if you will pay taxes, but when and how much. Government gives many

incentives in the form of tax deductions and credits, which can be used to reduce the

lifetime tax burden.

1.5.4 Investment and accumulation goalsPlanning how to accumulate enough money for large purchases, and life events is what

most people consider to be financial planning. Major reasons to accumulate assets

include, purchasing a house or car, starting a business, paying for education expenses,

and saving for retirement. Achieving these goals requires projecting what they will cost,

and when you need to withdraw funds. A major risk to the household in achieving their

accumulation goal is the rate of price increases over time, or inflation.

1.5.5 Retirement planningThis is the process of understanding how much it costs to live at retirement and coming

up with a plan to distribute assets to meet any income shortfall.

1.5.6 Estate planningEstate planning involves planning for the disposition of one's assets after death.

Typically, there is a tax due to the state or federal government at your death. Avoiding

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these taxes means that more of your assets will be distributed to your heirs. One can leave

your assets to family, friends or charitable groups.

1.6 Personal Factors to Consider in Financial Planning

1.6.1 Family Structure

Marital status and dependents, such as children, parents, or siblings, determine whether

you are planning only for yourself or for others as well. If you have a spouse or

dependents, you have a financial responsibility to someone else, and that includes a

responsibility to include them in your financial thinking. You may expect the dependence

of a family member to end at some point, as with children or elderly parents, or you may

have lifelong responsibilities to and for another person, (Hogarth, 1991).

1.6.2 Health

Health is another defining circumstance that will affect expected income needs and risk

tolerance and thus one should consider it in personal financial planning. Personal

financial planning should include some protection against the risk of chronic illness,

accident, or long-term disability and some provision for short-term events, such as

pregnancy and birth. If your health limits your earnings or ability to work or adds

significantly to your expenditures, your income needs may increase. The need to protect

yourself against further limitations or increased costs may also increase. At the same time

your tolerance for risk may decrease, further affecting your financial decisions, (Muller &

Hira 1984).

1.6.3 Career Choice

Career choices should be considered in financial planning, especially through educational

requirements, income potential, and characteristics of the occupation or profession.

Careers have different hours, pay, benefits, risk factors, and patterns of advancement over

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time. Thus, financial planning will reflect the realities of being a postal worker,

professional athlete, commissioned sales representative, corporate lawyer, freelance

photographer, librarian, building contractor, tax preparer, professor, Web site designer,

and so on, (Muller & Hira 1984).

1.6.4 Age

Needs, desires, values, and priorities all change over a lifetime, and financial concerns

change accordingly. Ideally, personal finance is a process of management and planning

that anticipates or keeps abreast with changes. Although everyone is different, some

financial concerns are common to or typical of the different stages of adult life. In middle

adulthood you may also be acquiring more assets, such as a house, a retirement account,

or an inheritance, (Hogarth, 1991).

1.7 Theoretical Framework

Gary Becker who taught at Columbia from 1957–1968 was a theoretical economist who

applied economics to decisions within the family, calling it the New Home Economics.

While Becker and the original home economists both looked upon the family as a

production unit as well as a consumption unit, Becker was primarily concerned with the

impact of family decisions on macroeconomics and national policy. The original home

economists, however, in addition to conducting government studies on cost of living and

expenditures, applied their chosen field of economics as a microeconomic exercise,

seeking to maximize production and make the economic processes more efficient and

profitable for the managers of that family, (Becker, 1963).

As noted by, Becker added richness to the concepts of resource allocation within the

family by his work on the allocation of time in non-work activities. While at Columbia,

Becker (1965) postulated a basic theoretical analysis of choice that considers the cost of

time on the same footing as the cost of market goods. He recognized that using the time

of a member of the family was using a resource of production. He envisioned the family

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as a small factory that combines “capital goods, raw materials and labor to clean, feed,

procreate and otherwise produce useful commodities” (Becker, 1965,). Since Becker was

an economic theorist, in those early years he almost never did empirical work to confirm

his theories, yet was quite definite in his ideas about the effects of decisions within the

family on the personal financing.

Another early theoretical source for personal financing mentioned by was Franco

Modigliani in 1954. Modigliani postulated that decisions on consumption and savings

were made by the individual consumer based on anticipated lifetime earnings and

consumption, not just on that year’s needs. This premise would explain the almost

universal consumption beyond their means by young people, not in terms of immaturity

but in their high expectations. This hypothesis has far reaching implications for the

national economy, one of which is that how much the population of a nation saves does

not depend on actual national income, but on the public’s perceived rate of growth of

national income, since it assumes its own income will grow accordingly.

Milton Friedman in 1957 presented the Permanent Income Hypothesis, which is similar

to Modigliani’s work. Subsequently, economists have tested this premise econometrically

with varying results, although most have tended to confirm it. A corollary of

Modigliani’s life cycle premise is that the rise of Social Security benefits has been a

contributing factor to the decline in savings in the United States since pension wealth

tends to reduce savings. This life-cycle view is the basic premise on which financial

planning bases retirement planning, turning the premise from an economic theory of how

people will naturally behave into a guideline. Textbooks in financial planning implicitly

use Modigliani’s theory when doing capital needs analysis to determine the amount a

client needs to save and invest for retirement.

One difference in life cycle theory in economics and in personal financing is in

perspective. Like Becker, Modigliani appears to have been more interested in the

implications for macroeconomics and public policy than in personal financing where one

is trying to maximize the utility of the economic and financial resources of one client. An

article that combines in its assumptions both Becker’s theories of decision making and

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Modigliani’s life cycle analysis with the pragmatic concerns of the practicing financial

planner appeared in the Journal of personal financing in 2001. That article discussed the

“tough choices” of saving for retirement and saving for college, and suggested that it was

best to counsel saving for retirement.

In 2004, a retrospective study of household income and retirement (Lahey, Kim, &

Newman, 2003) indicates that the concept of life cycle consumption patterns is an

entrenched part of retirement planning in financial planning practice. Furthermore, the

determination in this study that 40% of post-retirement income is earnings of other family

members is consistent with financial and economic theories of altruism and choice as

proposed by Becker (1965). Those theories were sustained in a quantitative study of

transfers of money and time within households. Thus the personal financing literature

supports the assertion that personal financing is firmly grounded in economic theory.

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CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Global Studies

2.1.1 Financial Satisfaction, Personal Finance-Work Conflict and Work

Outcomes (Pay Satisfaction, Organizational Commitment and

Productivity)

In this study done by Jinhee Kim in 1999 at Virginia Tech, the focus was on the

relationships between financial satisfaction, personal finance-work conflict, and work

outcome measures, which include productivity, organizational commitment, and pay

satisfaction. Significant relationships were found between financial satisfaction, personal

finance-work conflict, organizational commitment, and pay satisfaction. Work outcomes

reflect worker’s attitudes, behavior, and performance at the workplace. Job performance,

worker productivity, tardiness, absenteeism, retention, turnover, work commitment, job

satisfaction, morale, and loyalty are human satisfaction indicators of employee outcomes

at workplaces (Benton, 1998; Family and Work Institute, 1997; Robbins, 1998).

Workers’ personal finances are related to work outcomes. Problems in workers’ lives

affect their psychological states and behavior at work (Family and Work Institute, 1997).

Financial concerns spill over into workers’ responsibility at the workplace. Brown (1993)

suggested that 10% of all employees experience financial difficulties, which, in turn,

affect their workplace productivity. Garman, Leech, and Grable (1996) estimated that

around 15% of the workers in the United States are experiencing personal financial stress

that impacts their productivity. Joo (1998) found that a higher level of financial well-

being was associated with higher performance ratings, less absenteeism, and less work

time loss.

This study focused on the relationships between financial satisfaction, personal finance-

work conflict, and work outcome measures, which include productivity, organizational

commitment, and pay satisfaction. 12

Financial satisfaction is satisfaction with personal finance. Porter (1990) defined

perceived attributes as “an individual’s subjective evaluation of his/her own financial

situation.” She used satisfaction with income, level of living, net worth, general financial

management, cash management, credit management, risk management, capital

accumulation, and retirement/estate management for perceived indicators of financial

well-being. Hira (1986) studied financial satisfaction level among 201 money managers

in Iowa. The domains established for her study were satisfaction with money

management practices, level of living, level of saving, ability to stay out of debt, ability

to pay back money owed, level of assets, willingness to discuss money matters, and

ability to meet large emergency expenses. Scannell (1990) analyzed satisfaction with

present standard of living, emergency savings, past investments and savings, and general

financial situation presently, in 5 years, last year, and next year. Households who used

financial management practices had higher satisfaction with their financial situation.

Personal finance-work conflict is the extent to which personal financial concerns interfere

with a worker’s workplace responsibility. Since a worker is a personal financial manager,

work and personal finance are interrelated. Personal finance interferes with work and

work interferes with personal finance.

Examining the relationship between personal finance and work, previous studies relied on

the strain-based conflict, and examined the relationship between financial concerns and

work outcomes. Financial stress from mismanagement spillsover into workers’

performance at workplace. Financial problems are the second most important source of

employee stress (Cash, 1996). Williams, Haldeman & Cramer (1996) argued that there is

a direct relationship between financial problems and productivity. They stressed the

indirect effect of personal finance concern on potential turnover. Cash (1996) found a

positive relationship between stress level and absenteeism. In spite of these studies, there

is little research on how much financial concerns influence workplace behaviors. Joo

(1998) found that the level of financial well-being was negatively related to worker’s

productivity. Orthner and Pittman (1988) found that worker’s income adequacy is related

to work commitment.

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Few studies assess the extent to which how much workers feel their financial concerns

interfere with their work life. Since workers manage their personal finance at home as

well as at the workplace, personal finances interfere with work as well as work interferes

with personal finances.

Productivity refers to the overall effectiveness and performance of individuals or

organizations (Katzell & Yankelovich, 1975). Benton (1998) suggested rewards,

coworkers, management competence, the intrinsic quality of the work itself, promotion,

opportunities, and other social external conditions as determinants of job performance.

Job performance has been used to measure worker productivity. Measuring performance

determines how specific behaviors match predetermined performance standards (Benton,

1998). Most job performance is not easy to measure. Performance can be measured by

someone’s immediate superior, peer, self-evaluation, or immediate subordinates

(Robbins, 1998). Self-reported job performance can be measured by asking workers to

rate the quality and the quantity of their work performance (Katzell, Thompson, &

Guzzo, 1992; Netemeyer., Boles, & McMurrian, 1996); however, self-evaluation can be

easily biased as workers often give high marks on their own performance evaluation.

Organizational commitment reflects the linkage between work and worker. Work

commitment is defined as “the strength of an individual’s identification with and

involvement in a particular organization” (Porter, Steers, & Monday, 1974). Schechter

(1985) developed an organizational commitment questionnaire of continuance

commitment and value commitment. Mayer and Schoorman (1992) used Schechter’s two

organizational commitment measures to predict worker’s behavioral outcomes at the

workplace. They found that turnover was significantly more correlated with continuance

commitment, while performance, organizational citizenship behaviors, and satisfaction

were significantly more correlated with value commitment (Mayer & Schoorman, 1998).

Work commitment has been found to be associated with worker, job and organizational

characteristics. Glisson and Durick (1988) assessed the following effects of

characteristics of the workers (years in the organization, years of experience, age, sex,

education, salary), job-task characteristics (role conflict, role ambiguity, skill variety, task

14

identity, task significance), and organizational characteristics (workgroup size,

workgroup budget, organization age, workgroup age, leadership, residential services, and

residential/walk-in).

Pay satisfaction is a multidimensional construct. Schwab (1985) hypothesized five

components of pay satisfaction which are pay level, pay raises, benefits, structure and

administration. Research found that pay satisfaction is determined by not only actual

salary but workers’ characteristics such as their personal standards of comparison (Rice,

Philips, & McFarlin, 1990).

Respondents replied that they have low personal finance-work conflict, high productivity,

high organizational commitment, and high pay satisfaction. These results were consistent

with a previous study (Joo, 1998; Kratzer et al., 1998). This might result from the fact

that all constructs were measured by the self-report and respondents’ concern about the

employer’s accessibility of the data.

Although financial satisfaction explains the variance of personal finance-work conflict,

pay satisfaction, and organizational commitment that have been related to workers’ job

productivity in previous studies, there were no significant relationship between

productivity and financial satisfaction.

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2.2 Local Studies

2.2.1 Study on the Impact of Financial Knowledge on Self Beneficial

Financial Behavior and Education in Nairobi, Kenya

Carried out by to Kefela (2010), descriptive research design was used where data was

collected using structured questionnaires. 74 respondents were selected through stratified

sampling from a population of 300 clients in a certain bank. The data was analysed using

descriptive statistics and regression analysis through SPSS. The study revealed that

financial knowledge is directly correlated with self beneficial financial behavior and so

financial education should take a wholesome perspective to include the fundamentals of

finance since without understanding the basic finance principles, pension education

would be ineffective. In the words of Kefela (2010), “ participants who are less

financially literate are more likely to have problems with debt, are less likely to save, are

more likely to engage in high cost mortgages and are less likely to plan for retirement”

and by extension are less likely to make better choices for their pension schemes. Hence

education is essential in personal financial planning.

2.2.2 A Study on the Rate of Saving in Uganda, Kampala

Odundo, (2003) carried out the study on 212 households. Simple random sampling was

used to select 212 households who were involved in the study out of the 567 households

in a certain estate. Data was later analysed through means and percentages and presented

in tables and graphs. A saving for retirement culture is largely absent in African countries

due to the traditional systems of old age support by children and lack of knowledge on

savings options, which is evident in the fact that only 15% of Ugandans were in any form

of pension arrangement by 2009.

2.2.3 Study on Whether Private Foundations are Supporting Initiatives

to Improve Financial Literacy

Nyakundi, (2009) carried out the study using simple random sampling to select 45 firms

which were involved in the study out of the 154 in Nairobi, Kenya. Data was later 16

analysed through means and percentages and presented in tables and graphs. The results

showed that while private foundations are also supporting a number of initiatives to look

in to improving financial literacy in Kenya, these initiatives are mostly being

implemented through client-led finance institutions such as Equity Bank and

microfinance institutions.

2.2.4 Gataka Stella Eugene (2010) “Relationship between personal

financial literacy and lending by commercial banks in Kenya”

The objective was to determine the extent of use of person information in the lending

process.The study looked at three theoretical reviews.

One is life cycle saving and human capital. The models states that one can predict his

financial resources over a lifetime and thus make informed decisions (Hogan, 2007).

Unified theory of personal finance by Scotts Adams states that a nine-point formula can

be used for personal finance decisions for resource management.

Thirdly, the prospect theory describes how people make choices in situations to decide on

alternatives that involve risks thus in including a psychological view.

Personal financial literacy influences the lending decision by increasing the chances of

approval of the facility, client understanding of the decisions and consequences is key in

demonstrating serviceability. There is an economic reward opportunity for financial

intuitions, in embracing child financial literacy programs in elementary school grades and

in extending the learning and implementation components through integration of age

appropriate online banking services and socialization websites.

Personal finance advice availed to bank customers in Kenya free is tailored to bank

products and services rather to customers’ needs.

17

CHAPTER THREE

3.0 EXISTING GAPS IN PERSONAL FINANCE STUDIES

Studies have been conducted in the U.S, Europe and Asia examining the attitudes and

management of general public towards personal financial planning, which encompasses

money management, insurance planning, investment planning, retirement planning, and

estate planning. Similar studies should be carried out in Africa to establish whether the

findings in the other continents apply without a generalization.

Survey’s based on questionnaires have their limitations in that it is assumed that data

garnered from respondent is reliable. Additional collection methods such as interviews,

observation of non-quantitative factors should help boost the results that link between

retirement planning and other components of financial planning. Such information should

be used by regulators such as retirement regulatory authorities to encourage more people

especially in the private and informal sectors of the economy.

Some researchers have looked at mostly the demographic factors as affected by financial

planning. However, people vary in their outlook based on other strong factors such as

basic upbringing, traditions and culture, religious beliefs and exposure to financial

matters. These factors should be investigated to find out what effects they pose on

people’s attitude towards personal finance.

Research should be carried out to establish the different approaches that can be used to

foster personal finance in situations of varied macro-economic factors, advancement in

information, communication and technology, governance issues and globalization.

Future research can direct more efforts in identifying other important items in financial

literacy tests. A fruitful future study would be to cross validate the data and results of

prior studies so that we can develop a solid financial literacy scale. There is a stream of

literature focusing on personal financial wellness in the workplace (see Joo &Bagwell,

2003; Joo & Grable, 2004). Further studies through interdisciplinary research would

benefit our understanding of public financial literacy. 18

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