Financial literacy and personal finance in the Cape Coast Metropolis

Abstract

The study aimed generally to determine the scope of financial literacy and personal financing by people in the Cape Coast Metropolis. Under subscription of questionnaires led to 436 respondents from the cluster sampling method being used in the analysis. This allowed the determination of the various components and factors of financial literacy and personal finance. Factor analysis determined which indicators from various scenarios responded to, described the relationship between financial literacy and personal finance in the metropolis; as analyzed with Pearson’s bivariate correlations method. Personal finance overall, showed elements of savings, investments, financial planning for periods averaging three months at a time and a conflict of financial advice sources between financial professionals and friends and relatives but not individual’s self-efforts to acquire relevant financial decision making knowledge. Results determined that financial literacy and personal finance were generally low in the metropolis but that financial literacy and personal finance components do translate into financial literacy factors and subsequently into personal financing concerns. Relationships were determinable under the categories of financial responsiveness, Short-term spending tendency, spending tendencies generally, financial management, debt responsiveness and economy-mindedness of price levels or inflation. This researcher suggests building up self-learning efforts and individual self-reliance for financial decision making as some of the recommendations with which to improve financial literacy and personal finance in Cape Coast.