Behavioural biases and youths’ financial preparedness: Examining emergency savings in personal financial planning

Ang, Rong Yuen and Chin, Geng Yuan and Ng, Henrik Choo Qian and Lim, Chi Hong and Sim, Wee Shen (2025) Behavioural biases and youths’ financial preparedness: Examining emergency savings in personal financial planning. Final Year Project, UTAR.

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Abstract

This study examines how behavioural biases, financial literacy, social influence, self-control, and income level influence Malaysian youths' financial preparedness, particularly about emergency savings. Financial preparedness is critical for stability, yet many young people struggle owing to cognitive biases, poor information, peer pressure, and financial boundaries. This study used a quantitative cross-sectional design and was guided by the Theory of Planned Behaviour (TPB). An online questionnaire was issued to Malaysian youths aged 18-40, and 384 valid responses were evaluated using SPSS, which included descriptive statistics, reliability tests, normality test, and multiple regression. The findings indicate that all four independent factors have a substantial and positive relationship on financial preparation. Financial literacy was the most significant, highlighting the significance of knowledge and abilities in motivating savings behaviour. Social influence was significant, as supportive peer and family norms promoted readiness. The study found that self-control is crucial for resisting impulsive spending, whereas income level had a moderate but significant effect on saves capacity. The model accounted for 66.9% of deviation in financial preparedness. The report points out the importance of improved financial education, employer-led savings campaigns, and governmental measures that address behavioural and structural barriers. It contributes to personal financial planning research in emerging economies and enables policymakers, educators, and financial institutions useful information for increasing youths’ financial resilience. Keywords: Financial Literacy; Social Influence; Self-Control; Income Level; Financial Preparedness; Emergency Savings; Theory of Planned Behaviour Subject Area: HG 179 Personal Finance

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