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Effect of Financial Literacy On Management of Personal Finances Among Employees of Commercial Banks in Borama, District Somaliland Financial Literacy

The document discusses the effect of financial literacy on personal finance management among employees of commercial banks in Borama, Somaliland. It defines financial literacy as an individual's knowledge of financial concepts, principles, and tools needed to make sound financial decisions to secure their financial future. Personal finance is defined as all financial decisions and activities related to budgeting, savings, investments, mortgages, insurance, and other money-related choices. The document examines how financial literacy impacts employees' abilities to properly manage their personal finances through financial planning and avoiding impulsive or unsustainable spending behaviors.

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Hibaaq Axmed
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0% found this document useful (0 votes)
127 views1 page

Effect of Financial Literacy On Management of Personal Finances Among Employees of Commercial Banks in Borama, District Somaliland Financial Literacy

The document discusses the effect of financial literacy on personal finance management among employees of commercial banks in Borama, Somaliland. It defines financial literacy as an individual's knowledge of financial concepts, principles, and tools needed to make sound financial decisions to secure their financial future. Personal finance is defined as all financial decisions and activities related to budgeting, savings, investments, mortgages, insurance, and other money-related choices. The document examines how financial literacy impacts employees' abilities to properly manage their personal finances through financial planning and avoiding impulsive or unsustainable spending behaviors.

Uploaded by

Hibaaq Axmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Effect of Financial Literacy on Management of Personal Finances Among Employees of

Commercial Banks in Borama, District Somaliland

Financial Literacy

Financial literacy is defined as ones‟ knowledge of facts, concepts, principles, and technological

tools that are fundamental to being smart about money (Garman & Gappinger, 2008). While

several widely used definitions of financial literacy exist, all of them generally imply the ability

of individuals to obtain, understand and evaluate information required to make decisions to

secure their financial future as best as possible. According to the (OECD, 2011) financial literacy

is a combination of awareness, knowledge, skill, attitude and behavior necessary to make sound

financial decisions and ultimately achieve individual financial wellbeing.

Management of Personal Finances

Personal finance refers to as all financial decisions and activities that a person could make and

undertake. This could include budgeting household incomes and expenditures, savings,

investments, mortgages, insurance and all other decisions that require money. The most

important factor of personal finance management is financial planning, which should involve

analyzing the financial position and setting of short-term and long-term goals. Approaches to

financial management relates to impulsiveness during spending, using credit instead of cash and

general spending patterns that result in using more money than is available.

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