Coimbatore- A 2026 study by G. Gnanaselvi from the Research Department of Commerce, NGM College, Coimbatore, finds that financial literacy significantly improves saving behavior among low-income workers in Tamil Nadu. Published in the International Journal of Applied and Advanced Multidisciplinary Research (Vol. 4, No. 2, 2026), the research shows that workers with stronger financial knowledge and positive financial attitudes are more likely to save regularly, plan their savings, and set aside higher amounts despite limited income.
The findings are critical at a time when income volatility, inflation, and informal employment continue to challenge financial stability among low-income households in India. In districts like Coimbatore, where many workers depend on daily wages and contract jobs, consistent saving can mean the difference between financial resilience and economic vulnerability.
Why Financial Literacy Matters
Financial literacy refers to the ability to understand and apply basic financial concepts such as budgeting, interest rates, savings planning, and the use of banking services. Global evidence consistently links financial literacy with better financial outcomes, including higher savings and improved long-term stability.
In low-income communities, even small improvements in financial knowledge can produce measurable changes in behavior. However, limited access to formal education and financial services often restricts the development of these skills.
G. Gnanaselvi’s study provides empirical evidence from Coimbatore district, demonstrating how financial literacy interacts with income stability, financial attitude, and access to banking services to shape saving behavior.
How the Study Was Conducted
The research used a descriptive and analytical design. Primary data were collected from 200 low-income workers in Coimbatore district through structured questionnaires and personal interviews.
Respondents included:
- Daily wage workers (44%)
- Contract workers (31%)
- Self-employed individuals (25%)
Key characteristics of the sample:
- 68% earned below ₹15,000 per month
- 66% had only primary or secondary education
- 63% were between 31 and 50 years old
The study examined financial literacy, income stability, access to financial services, and financial attitude as influencing factors. Saving behavior was measured through three dimensions:
- Saving regularity
- Saving amount
- Saving planning
Statistical tools such as correlation analysis and multiple regression were used to identify relationships between variables.
Key Findings
The results reveal a strong and statistically significant relationship between financial literacy and saving behavior.
1. Financial Attitude Is the Strongest Predictor
Financial attitude showed the highest influence on saving behavior (β = 0.35). Workers who believed in disciplined saving and long-term planning were more consistent savers.
2. Financial Literacy Significantly Increases Saving
Financial literacy had a strong positive effect (β = 0.31). Workers with better knowledge of budgeting and financial products saved more regularly and planned their savings more effectively.
3. Income Stability Matters
Stable income significantly improved saving behavior (β = 0.24). Workers with predictable earnings saved larger amounts.
4. Access to Financial Services Enhances Savings
Access to banks and digital financial platforms contributed positively (β = 0.21), suggesting that financial inclusion strengthens saving discipline.
5. Education and Income Also Play a Role
Education level and monthly income were significant predictors. However, gender did not show a significant effect, indicating that saving behavior in this context is not gender-specific.
The model explained 58% of the variation in saving behavior (R² = 0.58), demonstrating strong explanatory power.
Broader Economic Implications
The findings align with financial literacy theory and behavioral finance principles. Knowledge alone does not guarantee saving. Instead, saving behavior emerges from a combination of:
- Financial knowledge
- Positive financial attitude
- Stable income
- Institutional access
For policymakers, this means that standalone financial literacy programs may not be sufficient. Effective interventions must integrate financial education with financial inclusion initiatives and income stabilization strategies.
For financial institutions, expanding access to low-cost savings accounts and digital platforms in semi-formal sectors could significantly increase household savings rates.
For development agencies, behavioral orientation programs that encourage disciplined saving may enhance financial resilience among vulnerable populations.
Academic Insight
G. Gnanaselvi of NGM College notes that financial literacy is “a critical but not standalone determinant” of saving behavior. The research demonstrates that cognitive understanding must be reinforced by behavioral orientation and structural support systems.
The study confirms that even within income-constrained environments, informed decision-making can improve financial outcomes.
Limitations and Future Research
The study focuses on Coimbatore district, which may limit generalization to other regions. The cross-sectional design does not establish long-term causality. Additionally, reliance on self-reported data may introduce response bias.
Future research may expand to longitudinal studies and include additional factors such as household size, financial shocks, and informal saving mechanisms.
Author Profile
- G. Gnanaselvi is a researcher in the Research Department of Commerce at NGM College, Coimbatore, Tamil Nadu, India. Her academic expertise includes financial literacy, consumer behavior, and financial inclusion among vulnerable populations. Her work focuses on practical strategies to strengthen financial resilience in low-income communities.
Source
- Gnanaselvi, G. (2026). Financial Literacy and Saving Behavior Among Low-Income Workers: Evidence from Coimbatore District.
- International Journal of Applied and Advanced Multidisciplinary Research (IJAAMR), Vol. 4, No. 2, pp. 79–88.
- DOI: https://doi.org/10.59890/ijaamr.v4i2.189
- Official Journal URL: https://nvlmultitechpublisher.my.id/index.php/ijaamr/index
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