The Impact of Financial Literacy on Selected Nigerian Public Sector Employees Savings Culture and Investment

Financial literacy ensures that an individual is able to match his income with his expenditure, lives within his means and forestall going broke or bankrupt. Like general or health literacy, financial literacy could be conceptualized as having two dimensions: understanding (personal finance knowledge) and use (personal finance application). In this study, we reviewed how financial literacy is measured in the current literature and examine how well the existing studies addresses whether financial literacy improves employees savings culture and investment. We review the literature on alternative policies to improve financial outcomes and compare the evidence on whether financial literacy improves employees spending habits, savings, investments and standard of living. The sample size of this survey based study consists of 110 working men and women from non-financial public sector in Nigeria. Data was analyzed using simple percentage and frequency distribution. The Statistical Package for Social Sciences (SPSS) was used in the analysis of the data. The major challenge in financial education has been how to measure the impact of financial education on the recipient savings culture. Investment and standard of living. On the other hand what is the influence of financial literacy on employees’ savings and investment outcome. It can be observed that in some instances those who did not have formal financial education and those who are primary or secondary school dropout have risen to own successful business empire. However, some who have tertiary financial education are struggling to survive. A large proportion of the sampled employees are deficient in financial literacy notwithstanding their exposure to financial education. Contrary to popular perception this research shows that there is no significant relationship between financial literacy and education level, savings culture and investments, of Nigerian public sector employees. Finally, we discuss directions ........