Individuals' level of Islamic financial literacy and budgeting and savings tendency: Turkey evaluation

The aim of this study is to measure the Islamic financial literacy level of individuals in four sub-dimensions: basic finance and economy, Islamic finance principles, participation banking and Islamic finance products, and to reveal the effect of Islamic financial literacy level on budgeting and saving tendencies. For this purpose, a questionnaire was applied to 530 participants living in Turkey and these collected data were analyzed with the SPSS 24 program. As a result of the analysis, it has been determined that individuals have a high level of basic finance and economic knowledge, a low level of knowledge of Islamic finance principles, and a medium level of knowledge of participation banking and Islamic finance products. Then, separate analyzes were made for four sub-dimensions in order to determine whether the Islamic finance literacy level differs according to demographic characteristics. Accordingly, the Islamic finance literacy level of individuals differed in all four sub-dimensions according to age, occupation, education level, monthly income, whether there is a family member working in the finance sector, and the preferred bank type. However, while the marital status of the individuals didn't differ significantly in the level of participation banking knowledge, and the bank account ownership did not differ significantly in the level of basic finance and economy, the Islamic finance literacy level of the individuals who preferred the interest bank did not differ significantly in any sub-dimension according to the reasons for working with the interest bank. In the study, the Islamic finance literacy level of individuals was also evaluated according to their budgeting and savings tendency. The results show that individuals who save have a higher level of knowledge about Islamic finance principles and products, and those who save regularly every month are more successful in Islamic finance principles than those who save once a year. In addition, individuals who do not save were asked whether they have a savings plan in the future, and it was seen that the basic finance and economic knowledge level of those who plan to save in the near future is higher than those who do not have a savings plan. When individuals were asked whether they made a budget or not, it was understood that those who made a monthly or weekly budget had higher basic financial and economic knowledge and knowledge of Islamic finance products than those who did not. Finally, individuals were asked whether they had a debt that they couldn't pay in last six months or that they missed the due date. According to this, while the general knowledge level of Islamic finance principles, the knowledge level of Islamic finance principles of those who do not have debts that they couldn't pay in the last six months or have passed the due date, the general knowledge level of Islamic finance principles was higher than those who did, while the opposite result was obtained at the knowledge level of participation banking.