Explore Factors That Affect Individuals Saving Habits, Such As Income Level, Age, and Financial Goals

Abstract

This study investigates the factors influencing individuals' saving behaviors, focusing on demographic, socioeconomic, psychological, and situational elements. By examining theoretical frameworks such as the Life Cycle Hypothesis (LCH) and the Permanent Income Hypothesis (PIH), the research explores how individuals' saving and consumption decisions are shaped by anticipated lifetime income and financial planning. The study also incorporates insights from the Behavioral Life Cycle Hypothesis, which addresses the impact of cognitive biases and emotional factors on saving behavior. The Theory of Planned Behavior (TPB) is utilized to understand how individuals' saving intentions are influenced by attitudes, social norms, and perceived behavioral control. Additionally, Financial Literacy Theory is examined to highlight the role of financial knowledge in effective saving practices. The study further explores how life transitions, such as marriage, parenthood, and job changes, impact saving behaviors. Through this comprehensive analysis, the research aims to provide a nuanced understanding of the multifaceted influences on saving habits, offering implications for financial education and policy development.