Understanding Financial Security from Consumer's Perspective: A Review of Literature

Abstract

This paper summarizes current research on financial security with the focus on the definition, differences financial security and financial vulnerability, and the room for improvement of financial security on the consumer context. Financial security is relatively a new term in the Malaysia, despite the term has been widely uses in United States and Europe countries. The methodology used in this paper is eighteen comprehensive empirical studies on the financial security which dated from 2007 to 2013 either in the U.S, U.K or outside of the U.S. The secondary data from the previous study on financial security in the various fields has been used in this review, but our concern will be on the personal finance field. Among the findings are the standard definition on the term of financial security is still vague; financial security is related with the consumer consumption such as spending , saving, and use of credit; lack of knowledge and skills among consumer effect their financial security in life; there is causal relationship between increases in financial security and consumer life satisfaction; and the benefits of financial security appear to span a number of areas including spending, savings, retirement planning, credit use, and investment. Generally, financial security is the state of having constant income or other resources to sustenance a standard of living now and in the foreseeable future. Future researcher should focus on the impact of government’s welfare intervention policies and programs that influence financial security among consumer.

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