Business Research Method
Saving Behaviour among University Student in Malaysia
Contents
CHAPTER 1…………………………………………………………………………………………………………………….……..3
1 Introducon…………………………………………………………………………………………………………………..…..3
1.1 Background………………………………………………………………………………………….…….……………….3
1.2 Problem Statement…………………………………………………………………………………………………….….4
1.3 Research Question…………………………………………………………………………………………..……………4
1.4 Research Objectives………………………………………………………………………………………………………4
1.5 Hypothesis of the study…………………………………………………………………………..……….……………5
1.6 Significance of study…………………………………………………………………………………..…………….….5
CHAPTER 2…………………………………………………………………………………………………………………….……..6
Literature Review…………………………………………………………………………………………………………………..6
2.1 Spending habits of college students…………………………………………………………………….…………..6
2.2 Limited amounts of allowance given………………………………………………………………….…….……..6
2.3 Financial literacy………………………………………………………………………………………..………………..7
2.4 Retire Planning…………………………………………………………………………………………………………….8
2.5 Theoretical Framework…………………………………………………………………………………………..…...10
2.6 Research Framework…………………………………………………………………………………..………………11
CHAPTER 3………………………………………………………………………………………………………………….………12
Methodology………………………………………………………………………………………………………….…………..12
3.1 Research Design………………………………………………………………………………………….……………..12
3.2 Research Location…………………………………………………………………………………..………………….12
3.3 Purpose of the study…………………………………………………………………………………………………….12
3.4 Sampling Method………………………………………………………………………………….…………………...12
3.4.1 Target Population and Sample Size………………………………………………………………………….13
3.5 Research Instrumentation……………………………………………………………………………………….……13
3.5.1 Reliability and Validity of the Instrumentation……………………………………..……………….….14
3.6 Measurement of Variables…………………………………………………………………………………………….14
3.7 Data Collection…………………………………………………………………………………………………….…….15
3.7.1 Pilot Study………………………………………………………………………………………….……….………15
3.7.2 Self-administered Questionnaire……………………………………………………………………..………15
3.7.3 Handouts at University……………………………………………………………………..………….……….15
Saving Behavior among University Student in Malaysia Page 1
Business Research Method
3.7.4 Personal Interview……………………………………………………………………………….……………….15
3.8 Data Analysis………………………………………………………………………………………………………….….16
3.8.1 Data Analysis Tool……………………………………………………………………………………….…….…16
3.8.2 Analysis Method…………………………………………………………………………………….…………….16
Conclusion………………………………………………………………………………………………………………………….17
Reference…………………………………………………………………………………………………………………………...18
Appendices……………………………………………………………………………………………………………….………..21
Questionnaire…………………………………………………………………………………………………………………..21
LIST OF TABLES………………………………………………………………………………………………………………...24
LIST OF FIGURES………………………………………………………………………………………………………….…..24
CHAPTER 1
1 Introduction
Saving Behavior among University Student in Malaysia Page 2
Business Research Method
In the modern world of our society a lot of university student are going through a financial
development with the lack of financial knowledge and not having the idea of saving behavior
in their mind it have created financial problem among student. Malaysia’s high school does
not have an education of personal finance leading to a lot of local Malaysian student lacking
the knowledge of how to handle their spending habits, when going through university is a
stage where students are learning to be independent and adjusting themselves from the
financial support from their parents, either going to college full time and spend very little
amount of money, or being employed in a company part time and attend school part time. In
Malaysia a majority of families are in the middle class level and are usually not able to
support their children with the amount of financial their need while going to the stage of
college, with the middle income level the monthly allowance that the families can give to
their children are limited, but the financial status for going through a college life is a higher
amount than going through elementary school or middle school. Therefore when problem
like this occur it can put an impact on college student which can lead to financial problem for
them.
1.1 Background
From the business dictionary, we can define savings as the portion of disposable income not
spent on consumption of consumer goods but accumulated or invested directly in
capital equipment or in paying off a home mortgage, or indirectly through purchase of
securities.
Saving Behavior among University Student in Malaysia Page 3
Business Research Method
1.2 Problem Statement
The previous studies found out that there is a relationship between the spending habits of
university students, limited amount of allowance given, awareness of saving for their future
and the financial literacy. This study was done to determine the factors that will affect
students to have a saving habit.
1.3 Research Question
1) What is the relationship between the spending habits and saving behaviour of
university students?
2) What is the relationship between the amount of allowance given and saving behaviour
of university students?
3) What is the relationship betweenawareness of saving habits and saving behaviour of
university students?
4) What is the relationship between the financial literacy and saving behaviour of
university students?
1.4 Research Objectives
1) To identify the relationship between spending habits and saving behaviour of
university students.
2) To identify the relationship between allowance given and saving behaviour of
university students.
3) To identify the relationship between awareness of saving habits and saving behaviour
of university students.
4) To identify the relationship between financial literacy and saving behaviour of
university students
1.5 Hypothesis of the study
Based on our research, there are few factors been used to test the hypothesis which included:
Saving Behavior among University Student in Malaysia Page 4
Business Research Method
Ha1: Spending habits has a positive effect on saving behaviour of college students.
H2: Limited amount of allowance given has a negative effect on saving behaviour
of college students.
H3: The benefits of awareness of saving habits has a positive effect on saving
behaviour of college students.
H4: The knowledge of financial literacy has a positive effect on saving behaviour
of college students.
1.6 Significance of study
With this study, the management of the bank will improved all the factors that will affect the
saving behaviour of university students. The main purpose of the management is to
encourage and attract more university students to adopt saving habits and indirectly help the
bank to gain more profits.
CHAPTER 2
Literature Review
2.1Spending habits of college students
There are various popular books for parents and “young people”, dispensing advice about
saving and spending (Rendon & Kranz, 1992). Davis and Taylor (1979) recommend that
children as young as six and seven years old should be encouraged to save for a relatively
inexpensive item that may be purchased in a matter of weeks. They argue that children should
be taught to save for emergencies, to make the best use of opportunities, and to acquire the
concept of interest.
Saving Behavior among University Student in Malaysia Page 5
Business Research Method
Some of the college students involved themselves in compulsive buying. Compulsive buying
has been defined as buying behaviour that is “uncontrollable” and “significantly distressing,
time consuming, or resulting in social or financial difficulties” (McElroy et al, 1994). It has
been estimated to occur in approximately 1.1 to 5.9% of the population and can lead to severe
disruptions in lives of those affected.
2.2 Limited amounts of allowance given
Previous studies have indicated that working class children often receive more money
through allowances than middle class children and get involved in the workings of the
economy (through jobs) earlier than middle class children. Alas in this study it was not
possible to test the hypothesis about class differences because of the limited number of
working class participants.
Abramovitch, Freedman and Pliner (1991) investigated how spending in an experimental
store was affected by children’s experience of money. Their participants (aged 6, 8 and 10)
were given $4, either in the form of a credit card, or in cash, to spend in an experimental toy
store which stored a variety of items priced from 50 cents to $5. They were allowed to take
home to save any unspent money. Children who received an allowance (pocket money) spent
roughly the same amount in the cash and credit card condition ($2.32 vs $2.42), but those
who did not receive an allowance spent much more with a credit card ($2.82) than when they
only had cash ($1.76). After they had furnished in the store, the children were given a pricing
test in which they had to say how much familiar items (e.g. running shoes, televisions) cost.
Children who received an allowance scored higher on this test, as did the older children.
These results suggest that receiving an allowance may facilitate the development of monetary
competence, though this result remains disputed (Furnham & Argyle, 1998). The amount,
regularity and rules attached to allowances may be equally predictive of monetary
understanding and usage as is whether it is received at all.
Saving Behavior among University Student in Malaysia Page 6
Business Research Method
2.3Financial literacy
Financial literacy is the ability to understand finance. More specifically, it refers to the set of
skills and knowledge that allows an individual to make informed and effective decisions
through their understanding of finances. Raising interest in personal finance is now a focus of
state-run programs in countries including Australia, Japan, the United States and the UK.
Although studying the financial knowledge of teens is not a new phenomenon in the
academic literature, it has received increasing attention recently in the public arena,
especially in the mass media. Whether the studies evolve from the academic or the public
arena or they are historic or recent, they all conclude that teens lack knowledge about
personal finance. In both the academic and mass media arenas, there has been a call for
financial education to increase the financial literacy of teens. Personal finance is not taught
systematically in high schools.
