Theory of planned behavior and financial literacy: a predictive model for saving money among Malay public servants in Northern Region of Malaysia

The way individual manages his finances varies around the world and it is being affected by the increase of living cost that influences the financial management. Although this situation affected the ability of the Malays to make savings, they still need to save money as a preparation for unexpected events or emergencies and for their future use. Accordingly, this study explores the extent to which eight factors influence the good attitude towards savings among employees working in the Malaysian public sector. It specifically examines the relationship between the eight factors which represent the independent variables and the attitude towards savings which represents the dependent variable of this study. Both quantitative and qualitative techniques were employed to identify the respondents’ attitude towards savings in this study by utilizing the use of a questionnaire and in-depth interview. The eight factors are financial distress (FD), family influence (FI), peer influence (PI), life satisfaction (LS), savings culture (SC), financial literacy (FL), government policy (GP) and environmental factor (EF). Based on the Partial Least Squares analysis (SmartPLS), FD, FI, PI, LS, SC, FL, GP and EF are significantly related to attitude towards savings. Therefore, the findings confirmed an earlier assumption that employees with not enough savings could not secure their future life. The study finally recommends ways to improve attitude towards savings among the employees, with an action plan to overcome the weaknesses, among others by having a more comprehensive savings plan that defines savings in terms of its purposes, key functions, efforts and competencies that are necessary to save money. The study also proposes that future research should look into the religious aspect that gives impact towards good savings behavior according to their religious teaching. The investigation equally highlights the importance of generating income as it can help individuals to face financial problems and improve their financial management practices. Besides that, aspects of parenting, consumerism programs and respondents’ choice have also been highlighted in this study