FACTORS INFLUENCING INDIVIDUAL SAVING BEHAVIOR: A LITERATURE REVIEW

Shine EMENIDO

doi:10.5937/jpmnt13-58158

Shine EMENIDO Univeristy of Southeastern Philippines, Obrero, Davao City, Philippines

DOI: https://doi.org/10.5937/jpmnt13-58158

Keywords: Saving, savings, money, Philippines

Abstract

Saving is crucial for financial stability and economic growth. However, many struggles to balance saving and spending due to low financial literacy and insufficient income. This study examined the factors that influence saving behavior of individuals in the Philippines to address barriers to effective saving habits. Specifically, this research aims to fill the gap in identifying the factors influencing saving behavior among Filipinos. Using a qualitative methodology, the study systematically reviewed and compared prior literature's methodologies, objectives, and findings, to identify significant and common factors influencing saving habits. The results showed the factors influencing saving behavior are as follows: parental socialization, financial literacy, self-control, and peer influence; sociodemographic factors including education, income and gender, family background, attitude, financial literacy, and locality, financial attitude toward saving and self-efficacy. Furthermore, this research may help address issues that result in Filipinos not having enough income to set aside savings. In conclusion, this study emphasizes the importance of saving as it can impact a nation's growth by contributing to capital accumulation, financial resilience, and economic stability, driving long-term growth, and reducing the vulnerability of the Philippine economy to external shocks.

References

Abdul Jamal, A. A., Ramlan, W. K., Mohidin, R., & Osman, Z. (2016). Determinants of Savings Behavior Among University Students in Sabah, Malaysia. International Journal of Accounting, Finance and Business, 1(1), 24–37. ISSN 0128-1844. https://eprints.ums.edu.my/id/eprint/21655.

Azman N. (2021). Many Malaysians need to work past 60 after Covid withdrawals. The Malaysian Reserve. http://psasir.upm.edu.my/id/eprint/91488.

Bangko Sentral ng Pilipinas. (2023). BSP bridges financial literacy gap among Filipinos. Republic of the Philippines: Philippine News Agency. https://www.pna.gov.ph/articles/1206091.

Bodenhorn, H. (2018). The forgotten half of finance: Working-class saving in late nineteenth-century New Jersey. In Research in Economic History Vol.34, 35-65. Emerald Publishing Limited. https://doi.org/10.1108/S0363-326820180000034002.

Circular Economy Indicators Coalition. (2024). Kosovo Real GDP Growth. https://www.ceicdata.com/en/indicator/kosovo/real-gdp-growth.

Collins, J. M. (2015). Paying for the Unexpected: Making the Case for a New Generation of Strategies to Boost Emergency Savings, Affording Contingencies, and Liquid Resources for Low-Income Families. A Fragile Balance: Emergency Savings and Liquid Resources for Low-Income Consumers. Palgrave Macmillan. https://doi.org/10.1057/9781137482372_1.

Collins, J. M., & Gjertson, L. (2013). Emergency Savings for Low-Income Consumers. Focus, 30(1), 1217.

Dasmin, H., & Fauzi, P. (2016). Factors influencing savings rate in Malaysia.

Doan, M. D. & Nguyen, V.T. (2020). The correlation between financial literacy and personal saving behavior in Vietnam. Asian Economic and Financial Review, 10(6), 590. https://doi.org/10.18488/journal.aefr.2020.106.590.603.

Gandelman, N. (2016). A Comparison of Saving Rates: Micro Evidence from Seventeen Latin American and Caribbean Countries. Economia Journal, 16(2), 201–258. http://doi.org/10.18235/0011701.

Hashim, D., Pin, F., & Mohd Isa, M. Y. (2017). Factors Influencing Savings Rate in Malaysia. International Journal of Economics and Finance, 9(6), 52-56. https://doi.org/10.5539/ijef.v9n6p52.

Ismail, S., Koe, W.-L., Mahphoth, M. H., Abu Karim, R., Yusof, N., & Ismail, S. (2020). Saving Behavior Determinants in Malaysia: An Empirical Investigation. International Conference on Economics, Business and Economic Education, 731–743. https://doi.org/10.18502/kss.v4i6.6639.

Jagadeesh, D. (2015). The impact of savings in economic growth: an empirical study based on Botswana. International Journal, 10.

Kamarudin, Z., & Hashim, J. H. (2018). Factors affecting the saving behaviour of taj international college students. Al-Qimah Al-Mudhafah, 4(1), 15-15. https://doi.org/10.330425997.

Kassim, A. A. M., Tamsir, F., Azim, Z. A. Z., Mohamed, J., & Nordin, H. N. M. (2020). Students’ saving behaviour: do demographic profile, parents’ background and financial literacy matter? An empirical study in private universities in Selangor. International Journal of Psychosocial Rehabilitation, 24(1), 844-849. https://doi.org/10.37200/IJPR/V24I1/PR200190.

Korzeniowska, A. M., & Ulman, P. (2023). Household saving motives and socio-demographic factors. Ruch Prawniczy, Ekonomiczny i Socjologiczny, 85(4), 177-197. https://doi.org/10.14746/rpeis.2023.85.4.09.

Leal, E. (2023). Parental Socialization, Peer Influence, Self Control and Financial Literacy as Determinants of Saving Behavior of the Workforce of a State College in Davao De Oro. Psychology and Education: A Multidisciplinary Journal, 7(5), 402-411. https://doi.org/10.5281/zenodo.7700257.

Lee, J. M., & Hanna, S. D. (2015). Savings Goals and Saving Behavior from a Perspective of Maslow’s Hierarchy of Needs. Journal of Financial Counseling and Planning, 26(2), 129–147. https://doi.org/10.1891/1052-3073.26.2.129

Ling, H. (2021). Determinants of saving behaviour among universities students in Guangdong Province. The Frontiers of Society, Science and Technology, 3(5), 51-70. https://doi.org/10.25236/FSST.2021.030510.

Marheni, D. K., Ramadani, A. G., & Kelvin, K. (2024). Factors affecting saving behavior of generation Z in Batam city. New Applied Studies in Management, Economics & Accounting, 7(2), 44-59. https://doi.org/10.22034/nasmea.2024.183191.

Modigliani, F., & Ando, A. K. (1957). Tests of the Life Cycle Hypothesis of Savings: Comments and Suggestions. Bulletin of the Oxford University Institute of Economics & Statistics, 19(2), 99–124. https://doi.org/10.1111/j.1468-0084.1957.mp19002002.x

Mohd Isa, S., & Kim, J. (2024). Examining Factors of Savings Behaviour Among Malaysian Youth. Journal of Governance and Integrity, 7(1), 650–667. https://doi.org/10.15282/jgi.7.1.2024.9733.

Morgan, P. J., & Long, T. Q. (2020). Financial literacy, financial inclusion, and savings behavior in Laos. Journal of Asian Economics, 68, 101197. https://doi.org/10.1016/j.asieco.2020.101197.

Nyhus, E. K. (2018). Saving Behaviour: Economic and Psychological Approaches. Economic Psychology. John Wiley & Sons Ltd. https://doi.org/10.1002/9781118926352.ch13.

Odionye, J. C., & Ugwuebe, O. B. E. U. S. (2016). Savings and economic growth nexus: Evidence from Nigeria. Growth, 6(4).

Pasaribu, R. M., Madeta, N. A., Farsa, M. R., & Margaretha, F. (2022). The Influence of Sociodemographics toward Saving Behavior Through Literacy and Risk Aversion In Jabodetabek. International Journal of Education, Business and Economics Research (IJEBER), 2(1), 10–33. https://doi.org/10.11648/j.ijber.20241302.12.

Rasmidatta, P. (2011). The relationship between domestic saving and economic growth and convergence hypothesis: case study of Thailand. Södertörns Högskola, Department of Economics.

Rehman, H. U., Bashir, F., & Faridi, M. Z. (2011). Saving Behavior among Different Income Groups in Pakistan: A Micro Study Saving Behavior among Different Income Groups in Pakistan: A Micro Study. International Journal of Humanities and Social Science, 1(10), 268–277.

Ribaj, A., & Mexhuani, F. (2021). The impact of savings on economic growth in a developing country (the case of Kosovo). Journal of Innovation and Entrepreneurship, 10, 1-13. https://doi.org/10.1186/s13731-020-00140-6.

Salignac, F., Hanoteau, J., & Ramia, I. (2022). Financial resilience: a way forward towards economic development in developing countries. Social Indicators Research, 160(1), 1-33.. https://doi.org/10.1007/s11205-021-02793-6.

Statista. (2024). Gross savings as a share of GDP in the Philippines from 2009 to 2023. https://www.statista.com/statistics/779414.

Statman, M. (2017). Standard and Behavioral Life-Cycle Theories and Public Policy. The Journal of Retirement, 5(2), 12–25. https://doi.org/10.3905/jor.2017.5.2.012.

Syahrom, N. S., Nasrudin, N. S., Mohamad Yasin, N., Azlan, N., & Manap, N. (2017). Relationship of saving habit determinants among undergraduate students: A case study of UiTM Negeri Sembilan, Kampus Seremban. IOP Conference Series: Materials Science and Engineering, 226(1). https://doi.org/10.1088/1757-899X/226/1/012195

Tharanika, K., & Andrew, A. (2017). Factors influencing on saving behaviour among university students. International Journal of Research, 4(14), 861-871.

United Nations Conference on Trade and Development. (2004). Development and Globalization: Facts and Figures. https://unctad.org/en/Docs/gdscsir20041_en.pdf.

World Bank Organization. (2015). How good are Filipinos with their finances? www.worldbank.org/en/news.

Zainudin, N. O. R. L. I. T. A., & Shaharuddin, N. S. (2022). Fac-tors Affecting Individual Saving Behavior: A Review of Literature. In Proceeding of the 9th International Conference on Man-agement and Muamalah. https://doi.org/ 362859712.