Research On The Impact Of Financial Literacy On Residents' Preventive Savings

After the outbreak of the financial crisis in 2008,the problem of insufficient financial literacy of residents and the serious consequences brought about by them have received wide attention from all countries in the world.Since the 21 st century,digital technology has been fully integrated into daily life,and the financial market has also developed more rapidly.For the ordinary residents,proficient in financial literacy,effectively managing personal savings assets and financial affairs are playing an important role of making correct family financial decisions.According to the data released by the National Bureau of Statistics,since 2008,Chinese household savings rate has been declining,while the per capita of total wealth and liabilities have shown a clear upward trend.In the background of this times,the household wealth management style has undergone significant changes.Therefore,the rational allocation of personal investment and preventive savings is extremely important.This paper uses the data of 2017 XX Bank Financial Literacy Questionnaire Survey.Under the control of gender,age and other related factors,dividing financial literacy into two categories,it mainly studies the influence of subjective and objective financial literacy on residents' preventive saving behavior.The study obtained the following results: First,objective financial literacy has a significant positive impact on residents' precautionary savings behavior,while subjective financial literacy has a significant negative impact on residents' precautionary savings behavior.More importantly,subjective financial literacy has a greater impact on residents' preventive savings behavior than objective financial literacy.Second,risk attitude,the location of the household registration and the level of education will affect residents' possibility of preventive savings.Third,subjective financial literacy has a significant negative impact on the relationship between objective financial literacy and residents' preventive savings,explaining that financial self-confidence has a positive effect,but it is harmful if overconfidence is excessive.Fourth,objective financial literacy will reduce the probability of residents' preventive savings by enhancing risk appetite.however,risk attitude can be unable to affect the relationship between subjective financial literacy andresidents' preventive savings.Fifth,overconfidence has a significant negative impact on residents' preventive savings.The more over-confident people with lower objective financial literacy will not make preventive savings.Once again,verifying that it is good for residents to have confidence,excessive trust will have a negative impact.But,overconfidence does not create a regulatory effect between subjective financial literacy and resident preventive savings.Therefore,on the basis of the above findings,this paper suggests that: relevant government departments should scientifically construct a financial literacy cultivation system,and financial literacy universal education can be adapted to local conditions and varies from person to person.Financial institutions should normalize the mobile publicity education of financial literacy,accurately consider the financial literacy level and risk attitude of residents,provide appropriate investment advice and savings plans.Resident individuals should objectively assess their financial literacy and enhance their risk awareness so that they can reasonably arrange for preventive savings.